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Full text of "Medical appliances and the elderly, unmet needs and excessive costs for eyeglasses, hearing aids, dentures, and other devices : report"

[COMMITTEE PRINT] 



MEDICAL APPLIANCES AND THE ELDERLY: 
UNMET NEEDS AND EXCESSIVE COSTS 
FOR EYEGLASSES, HEARING AIDS, 
DENTURES, AND OTHER DEVICES 



REPORT 

BY THE 

SUBCOMMITTEE ON HEALTH AND 
LONG-TEEM CARE 

OF THE 

SELECT COMMITTEE ON AGING 
HOUSE OF REPRESENTATIVES 
NINETY-FOURTH CONGRESS 

SECOND SESSION 



If: 

SEPTEMBER 1976 




Printed for the use of the Select Committee on Aging 



U.S. GOVERNMENT PRINTING OFFICE 
78-385 WASHINGTON : 1976 



For sale by the Superintendent of Documents. U.S. Government Printing Office 

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SELECT COMMITTEE ON AGING 



RANDALL, Missouri, Chairman 

BOB WILSON, California 
WILLIAM C. WAMPLER, Virginia 
JOHN PAUL HAMMERSCHMIDT, Arkansas 
H. JOHN HEINZ III, Pennsylvania 
WILLIAM S. COHEN, Maine 
RONALD A. SARASIN, Connecticut 
WILLIAM F. WALSH, New York 
CHARLES E. GRASSLE Y, Iowa 
GILBERT GUDE, Maryland 



WM. J. 

CLAUDE PEPPER, Florida 
SPARK M. MATSUNAGA, Hawaii 
EDWARD R. ROYBAL, California 
FRED B. ROONEY, Pennsylvania 
MARIO BIAGGI, New York 
WALTER FLOWERS, Alabama 
IKE F. ANDREWS, North Carolina 
JOHN L. BURTON, California 
EDWARD P. BEARD, Rhode Island 
MICHAEL T. BLOUIN, Iowa 
DON BONKER, Washington 
THOMAS J. DOWNEY, New York 
JAMES J. FLO RIO, New Jersey 
HAROLD E. FORD, Tennessee 
WILLIAM J. HUGHES, New Jersey 
MARILYN LLOYD, Tennessee 
JIM SANTINI, Nevada 
TED RISENHOOVER, Oklahoma 

Robert M. Horner, Staff Director 
Lyle McClain, Counsel 
Martha Jane Maloney, Professional Staff Assistant 
V. Bernice King, Financial Secretary 



Subcommittee Membership 

(WM. J. RANDALL, Missouri, Chairman of the full committee, and BOB WILSON, California, Ranking 
Minority Member, are members of all subcommittees, ex officio.) 

Subcommittee No. 1 — Retirement Income and Employment 

WM. J. RANDALL, Missouri, Chairman 

WALTER FLOWERS, Alabama WILLIAM C. WAMPLER, Virginia 

JOHN L. BURTON, California CHARLES E. GRASSLE Y, Iowa 

MICHAEL T. BLOUIN, Iowa GILBERT GUDE, Maryland 

DON BONKER, Washington 
THOMAS J. DOWNEY, New York 

Michael W. Murray, Majority Staff 
Nancy Hobbs, Minority Staff 

Subcommittee No. 2 — Health and Long-Term Care 

CLAUDE PEPPER, Florida, Chairman 

IKE F. ANDREWS, North Carolina H. JOHN HEINZ III, Pennsylvania 

EDWARD P. BEARD, Rhode Island WILLIAM S. COHEN, Maine 

JAMES J. FLO RIO, New Jersey 
MARILYN LLOYD, Tennessee 

Robert S. Weiner, Majority Staff 

Elliot Stern, Minority Staff 
Yosef Riemer, Research Assistant 



Ill 



Subcommittee No. 3 — Housing and Consumer Interests 

EDWARD R. ROYBAL, California, Chairman 

FRED B. ROONEY, Pennsylvania JOHN PAUL HAMMERSCHMIDT, Arkansas 

HAROLD E. FORD, Tennessee WILLIAM F. WALSH, New York 

JIM SANTINI, Nevada 

Jose S. Garza, Majority Staff 
Patricia C. Lawrence, Minority Staff 

Subcommittee No. 4 — Federal, State, and Community Services 

SPARK Iff. MATSUNAGA, Hawaii, Chairman 

MARIO BIAGGI, New York BOB WILSON, California 

WILLIAM J. HUGHES, New Jersey RONALD A. SARASIN, Connecticut 

TED RISENHOOVER, Oklahoma 

Edward F. Howard, Majority Staff 
Robetta Bretsch, Minority Staff 



Digitized by the Internet Archive 

in 2013 



http://archive.org/details/meianceOOunit 



MEMORANDUM 



To: Members of the Subcommittee on Health and Long-Term 
Care. 

From: Claude Pepper. Chairman. 
Re: Medical Appliances Report^ 

As part of its continuing examination of the health care problems of 
the elderly, the Subcommittee on Health and Long-Term Care has 
investigated the needs of the elderly for hearing aids, eyeglasses, and 
dentures as well as the high eo-t of these medical aprjliance.-. The 
elderly of this nation are entitled to the best health care that is avail- 
able in the United State-. As this report demonstrates, in the area 
of medical appliances, they are not getting it. There are two reasons: 
The lack of federal assistance to help the elderly obtain desperately 
needed devices and the lack of adequate safeguards to protect them 
from abuses in purchasing these health aid-. 

An earlier subcommittee report. ''New Perspectives in Health 
Care for Older Americans. " recommended that Medicare Part B 
be extended to cover the cost of hearing aids, eyeglasses, and dentures 
for the elderly. This report restate- that recommendation and provides 
further documentation of its urgency. 

This study is based on testimony presented to the subcommittee 
at its June 23 and 24 hearings on "Medical Appliances for the Elderly: 
Needs and Costs.*'' Witnesses at the healings included Mr. Nelson H. 
Cruikshank. President of the National Council of Senior Citizen-, 
and Dr. Sidnev Wolfe. Director of the Public Citizen*- K .:.>.n 
Research Group. Other witnesses included representatives of the 
Federal Trade Commi—ion. the Veterans Administration, the De- 
partment of Health. Education and Welfare. Mutual of Omaha 
Insurance Companv, Equitable Life Assurance Societv. 3 rudential 
Insurance of America, Bausch and Lomb (eyeglass manufacturers), 
the American Dental Association, the Lumiseope Corporation 
(distributors of home blood pressure monitoring kits, . W. A. Baum. 
Inc. (manufacturers of home blood pressure monitoring kits-, and 
the National Hearing Aid Society. Additional information he,- been 
provided by the General Accounting Office. Cars tensor, and Associ- 
ates, the American Speech and Hearing Association, the Ebenezer 
Society, the Sexton Dental Clinic, the New York City Department 
of Consumer Affair-, the New York Consumer Services Soii-ty. the 
National Center for Health Statistics, the New York Times. Geri- 
atric-s Magazine. Money Magazine. Consumer Reports Magazine, 
Moneysworth Magazine. Wa-hingtonian Magazine, the Federal 
Council on the Aging, the Hearing Aid Industry Conference, the 
American Council of Otolaryngology, the National Association of 
Blue Shield Plans, the Department of Defense, the General Services 
Administration, the Indian Health Service, and numerous congres- 
sional committees and state health and related departments. 

(V) 



VI 



To all of these individuals, agencies, and groups, I wish to extend 
my thanks. In addition, I wish to thank Mr. Bob Hoyer, Mr. Glenn 
Markus, Mr. Herman Schmidt, Ms. Jennifer O'Sullivan, Mr. Edward 
Klebe, and Mr. Henry Cohen of the Library of Congress for providing 
assistance at every stage of this study. 

Finally, I wish to commend and thank Mr. Yosef Riemer, research 
assistant on loan to the subcommittee from Brandeis University, for 
his invaluable assistance in the research and preparation of this 
report. I would also like to thank Dr. Marver Bernstein, President of 
Brandeis University, for making Mr. Riemer available to assist the 
subcommittee in this important area. 



"They pay but not in dollars. They pay in the quality of life. 
Some cut down on food requirements. Some go without the proper 
type of shelter. Some cut off their social life. Many just do without 
(eyeglasses, hearing aids, and dentures) and fall back into more and 
more seclusion and live a restricted life because these appliances 
are not available to them as they should be." 

Mr. Nelson H. Cruikshank, 

President, National Council 

of Senior Citizens. 

"The only way out is to make impossible choices. It is impossible 
for senior citizens to decide whether or not they want to hear what 
goes on in the world or whether they want to eat." 

Dr. Sidney Wolfe, 
Director, Public Citizen's 

Health Research Group. 

"If we are lucky, we will all grow old. But how frightening to grow 
old and not be able to see clearly, hear distinctly, or eat properly 
because we cannot afford the necessary medical appliances to aid 
our failing facilities." 

Dr. Robert B. Lytle, 
American Dental Association. 



(VII) 



CONTENTS 



Page 



Memorandum v 

Quotes vn 

Summary of findings and recommendations xi 

Introduction 1 

Chapter I — Vision Care 5 

A. Need for eyeglasses 5 

B. The present delivery system of glasses and its abuses 6 

C. Cost of eyeglasses 7 

D. Coverage of eyeglasses under existing health benefit programs 8 

Chapter II — Dental Care 9 

A. Need for dentures 9 

B. The present delivery system of dentures 13 

C. Cost of dentures 14 

D. Payment for dental services under existing health benefit programs. 16 
Chapter III — Hearing Care 19 

A. Need for hearing aids 19 

B. The present delivery and pricing system of hearing aids and abuses. 20 

C. Payment for hearing aids under existing health benefit programs 25 

Chapter IV — Prosthetic Devices and Other Durable Medical Equipment. 25 

A. Excessive medicare payments for overpriced pacemakers 25 

B. Unnecessarv medicare payments for durable medical equipment 

items.....' 26 

C. Home blood pressure monitoring kits 28 

D. Coverage of other durable medical equipment under medicare for 

residents of institutions 28 

Chapter V — Existing Contract Purchasing Programs: Examples of Federal 

Assistance 30 

A. Veterans Administration contract purchasing program 30 

B. Department of Defense contract purchasing program 31 

C. General Services Administration contract purchasing program 32 

D. Other contract purchasing programs 33 

Chapter VI — Conclusions and Recommendations 34 

Glossary 45 



(IX) 



7S-3S5— 76 2 



SUMMAKY OF FINDINGS AND RECOMMENDATIONS 



The well-being of virtually all of the 22.4 million elderly Americans 
is dependent on one or more medical appliances. Presently the mas- 
sive needs of the elderly for appliances like eyeglasses, dentures and 
hearing aids are unmet because, in many cases, the elderly cannot 
afford the devices and because public and private health benefit pro- 
grams have provided only limited help in this area. The elderly who 
are able to afford needed medical appliances are frequently the victims 
of abuses such as overpricing and unnecessary services. 

Vision Care 

More than 20 million elderly Americans require and own eyeglasses. 
However, over five million elderly Americans are wearing glasses 
which need correction (pp. 5-6). 

Serious evidence of abuse has come from a New York survey which 
demonstrated that one out of five eye examinations given by optom- 
etrists resulted in unnecessary prescriptions (pp. 6-7). 

Numerous surveys of retail firms selling eyeglasses are conclusive 
evidence of overpricing. The surveys show a 200 to 300 percent 
variance in the cost of identical eyeglasses (p. 7). 

Medicare does not cover the cost of eyeglasses or related examina- 
tions. Medicaid is only slightly more helpful, paying for eyeglasses 
for those elderly people who are eligible in only half the states. Private 
insurance companies rarely cover any vision care expenses (p. 8). 

Dental Care 

Dental problems, such as tooth decay and periodontal disease; 
are so widespread among the elderly that half of all persons over 65 
have no natural teeth (pp. 10-11). 

6.2 percent of those elderly people who are without natural teeth 
also have no dentures. An additional 30 percent of those without 
natural teeth do have dentures, but they are ineffective and require 
refitting or replacement (pp. 11-12). 

The subcommittee found that identical dentures, including identi- 
cal fitting procedures, range in price from $100 to $1,000, and con- 
cluded that this discrepancy in large part, reflects overpricing (pp. 
14-15). 

Medicare covers only selected forms of dental surgery, but not 
routine dental care or dentures. Medicaid programs in 36 states do 
cover dental care and dentures, but that number continues to decline 
as many states strive to cut back their expenditures. While dental 
insurance is the fastest growing line of private health insurance, den- 
tal costs remains the least insured major health cost in the United 
States (pp. 16-18). 

Hearing Care 

More than one half of all persons over 65 suffer from impaired 
hearing. For 8 percent of the elderly, the problem is so severe that they 
are unable to hear words spoken in a normal voice (pp. 19-20). 

The hearing aid delivery system, as presently structured, fosters 
a clear and continuing conflict of interest that pits the profit orienta- 
tion of the businessmen who sell hearing aids against the health and 

(XI) 



XII 



economic interests of elderly consumers. Studies have demonstrated 
that the result of this system of allowing the hearing aid dealers, 
rather than physicians, to determine the need of elderly consumers 
for aids, is frequent recommendations by dealers for hearing aids that 
cannot help buyers (pp. 21-22). 

According to three different panels of hearing experts, the training 
that hearing aid dealers receive is totally inadequate. To compound 
this problem, many states have no law which set up minimum educa- 
tional standards that dealers must meet. Many other states do have 
these laws, but they are often ineffective and frequently lead to the 
hearing aid dealers regulating themselves (pp. 22-23). 

There is almost a total lack of oversight and scrutiny of the hearing 
aid industry. The Subcommittee heard evidence from the Federal 
Trade Commission of numerous instances of misrepresentation and 
anti-trust violations such as price-fixing in the hearing aid industry 
(p. 23). 

The cost of hearing aids is excessively high (two and a half times 
the wholesale price) and represents a formidable barrier to those 
elderly people who need the devices (pp. 24-25). 

Medicare does not pay for hearing aids at all. Medicaid pays for 
hearing aids for the elderly in only 11 states. Private health insurance 
policies rarely cover hearing aids (p. 25). 

Prosthetic Devices and Other Durable Medical Equipment 

There is evidence of significant overpricing of pacemakers. The 
Public Citizen's Health Research Group has reported that the actual 
cost of a pacemaker is "several hundred dollars." Yet, these pros- 
thetic devices generally sell for $1,300. The Department of Health, 
Education, and Welfare continues to ignore the overpricing and to 
pay these unreasonabty high prices to manufacturers for pacemakers 
that are purchased by those eligible for Medicare. Pacemakers are 
big business — endorsed for investment by a reputed Wall Street firm 
because of 30-50% annual profits — despite Medicare requirements 
for HEW to reimburse only "reasonable cost." The subcommittee 
found that since Medicare pays for most pacemakers, patients and 
doctors are not concerned with price, providing little if any incentive 
for manufacturers to cut prices (pp. 25-26). 

There is also conclusive evidence of the waste of 10 million taxpayer 
dollars per year because Medicare allows excessive payments, as 
opposed to cheaper methods of acquisition or leasing of hospital beds, 
crutches, wheelchairs, and dialysis equipment, that are covered by 
Medicare. Four years ago legislation was passed authorizing HEW 
to take the necessary steps to end that waste. Yet, the Department 
has progressed only to the point of conducting a "design of an experi- 
mental concept" (pp. 26-27). 

There is a serious controversy concerning home blood pressure 
monitoring kits. Manufacturers of higher-priced mercurial (using 
mercury level to measure) devices claim that this type of device is 
the only accurate way to measure blood pressure. On the other hand, 
distributors of inexpensive aneroid (using air pressure) devices argue 
that this t}^pe of device, while not as accurate as a mercurial device 
is certainly accurate enough for home use since it meets the federal 
accuracy standard of .3 millimeters. Thus, the aneroid distributors 



XIII 



argue that any difference in accuracy does not justify the higher cost 
of mercurial devices (p. 28). 

An anomaly in wording of Section 1861 (s) of Title XVIII of the 
Social Security Act has led to denials of coverage of oxygen tents 
and other durable medical equipment to patients in skilled nursing- 
facilities and residents of intermediate care facilities while elderly 
people living outside these institutions do receive this coverage 
(pp. 28-29). 

Contract Purchasing 

Several existing government programs have demonstrated tha 
by making use of volume contract purchasing of eyeglasses, hearing 
aids, and dentures, the costs of these appliances are lowered by as 
much as 500 percent. The most extensive of these programs is op- 
erated by the Veterans Administration. In 1974, for example, the 
VA purchased 13,700 hearing aids from 14 companies and provided 
them to those eligible at a cost of $205 per hearing aid. This cost 
has been confirmed by a General Accounting Office report and is S145 
below the average retail hearing aid cost. Programs operated by the 
Department of Defense, General Services Administration, and the 
State of Michigan are other examples of contract purchasing programs 
that have provided medical appliances for prices well below retail 
levels (pp. 30-33). 

Recommendations to the Congress 

J . Medicare Part B should be extended to cover eyeglasses, hearing aids, 
and dentures and related medical care (pp. 34-36) 

Because of the great need of the elderly for eyeglasses, hearing aids, 
and dentures, and because of the hardship that paying for these 
expensive appliances represents to them, the subcommittee considers 
it essential that federal assistance be increased to meet those needs. 
This should be done either as part of a comprehensive national health 
insurance program or separately, as an extension of the Medicare 
program (p. 34). 

The subcommittee believes that in the absence of national health 
insurance it is vital that the optional Part B section of Medicare be 
extended to cover the cost of hearing aids, eyeglasses, dentures, and 
medical care related to fitting those items. With the extension, 
elderly people who chose to enroll in the voluntary Part B program, 
would be covered for 80 percent of the reasonable charges for these 
health expenses once they had spent more than $60 in that year on 
covered Part B medical care expenses (p. 35). 

To pay for the additional benefits, Part B monthly premiums and 
the federal contribution to the Medicare program would be increased 
slightly. That increase would be in accordance with the apportion- 
ment system used in 1977 to divide total Part B costs between the 
federal government and the elderly paying the premiums. Thus, the 
effect of the proposal would be an increase of $2.66 a month in 
premiums and an increase of $1.9 billion in the federal share of the 
program during the first year of the Medicare extension. As is presently 
done with the federal share of the existing Medicare Part B program, 



XIV 



all the federal funds would be paid from general revenues in order to 
protect the integrity of the Social Security Trust Fund. In addition, 
it is important to note that the cost of the federal share and of the 
premiums would decline by as much as one billion dollars a year 
after the fifth year of the program since the enormous backlog of 
elderly people who desperately need medical appliances will be 
reduced by that time (p. 35). 

The subcommittee has found that the Medicare Part B extension 
could be quickly implemented by making use of the existing Medicare 
administrative mechanisms. The additional coverage would represent 
no extra burden to these mechanisms (p. 35) . 

In addition, Medicare should be extended to cover oxygen tents for 
all elderly people, rather than just those outside of skilled nursing 
facilities or intermediate care facilities (p. 36) . 

2. Medicare should utilize contract purchasing where feasible in providing 
eyeglasses, hearing aids, and dentures to the elderly (pp. 36-38) 

While it is imperative that Medicare benefits be extended, it is 
equally imperative that the extension not be done in such a way as to 
allow the inadequacies and abuses of the present delivery system of 
medical appliances to continue. The subcommittee thus recommends 
that volume contract purchasing of eyeglasses, hearing aids, and 
dentures be utilized by the Department of Health, Education, and 
Welfare to provide these appliances to those elderly people who opt to 
receive the Part B coverage. HEW should begin to experiment with 
contract purchasing immediately. Within 5 to 10 years, it should be 
the official HEW policy that contract purchasing be utilized wherever 
feasible in the purchase of eyeglasses, hearing aids, and dentures for 
those covered. The subcommittee also recommends that states con- 
sider making use of contract purchasing of medical appliances as 
part of their Medicaid programs. Existing government contract 
purchasing programs are conclusive proof that this recommendation 
would result in a reduction in the actual cost of medical appliances 
from the excessively high levels of the present (pp. 36-37) . 

Under contract purchasing, manufacturers of medical appliances 
would submit bids to the Department of Health, Education, and 
Welfare. HEW would on the basis of competitive bidding, award 
contracts to selected manufacturers. The manufacturers would then 
distribute the agreed on devices to retail outlets. The retailers would 
provide the health aids to those elderly people who have paid the 
Part B premiums and would receive reimbursement from Medicare 
(p. 37). 

Recommendations to Federal Departments, to the States, and 

to Consumers 

1. A series oj safeguards should be implemented to end abuses against 
medical appliance consumers (pp. 38-41) 

Because of evidence of abuses and inadequacies in the present 
pricing and delivery systems of medical appliances, it is urgent that a 
series of major safeguards be enacted to protect elderly consumers from 
the kinds of abuses that they suffer today. Thus, the subcommittee 
recommends that the following safeguards be implemented by federal 
and state agencies (p. 38) : 



XV 



The first of these necessary safeguards is continued and increased 
scrutiny by the Federal Trade Commission and the Food and Drug 
Administration. For example, the subcommittee calls for an investiga- 
tion by the Federal Trade Commission of unreasonable charges in the 
hearing aid, eyeglass, denture, and pacemaker industries (p. 38). 

The second necessary safeguard is action by the states individually 
and the Federal Trade Commission nationally to remove the bans 
which bar price advertisements of medical appliances. According to 
the FTC's Bureau of Consumer Protection, these bans "reduce com- 
petition, restrict consumer access to information, and 'allow higher 
than competitive prices to exist" (pp. 38-39). 

The third safeguard is improved HEW actions to reduce those 
Medicare expenditures which are excessive and unnecessary. First of 
all, HEW should immediately implement leasing and other economical 
methods of obtaining medical equipment. Legislation authorizing this 
was passed four years ago. The subcommittee can see no reason for 
the delay. Second of all, HEW should limit its payments for such 
devices as pacemakers to "reasonable charges" and stop paying for 
these devices when they are overpriced. Other HEW actions that are 
needed to end abuses of Medicare covered medical appliances include 
audits, on at least a random basis, of medical appliance manufacturers 
and providers and the imposition of a uniform system of quick and 
severe penalties for those manufacturers, providers and consumers who 
defraud the public or Medicare in this area. Regulations are also 
needed to protect the freedom of choice of Medicare recipients in 
purchasing durable medical equipment. Finally, HEW requirements 
are needed which would mandate cross referencing of "prevailing 
rates" (listing of prices by dealers in a given area) by all Medicare 
intermediaries (pp. 39-40). 

Fourth, there is a particularly severe need for additional safeguards 
specifically directed at ending the inadequacies and overpricing of the 
present hearing aid delivery system. These include Federal Trade 
Commission regulations that would guarantee that hearing aid pur- 
chasers have the right to return hearing aids, end misrepresentation 
in hearing aid advertising, and would bar high-pressure techniques in 
the sale of hearing aids. In order to eliminate the widespread sale of 
unnecessary hearing aids, the subcommittee believes that the Food 
and Drug Administration should implement regulations which would 
require that everyone, except those allowed specific exemptions, be 
examined by a physician, preferably a hearing specialist before pur- 
chasing a hearing aid. In other words, a physician rather than a hear- 
ing aid dealer should determine if a person needs a hearing aid or not. 
The subcommittee thus believes that the regulation that has been 
proposed by the FDA which would require only persons under the 
age of 18 to have the examination, is not adequate. Finally, the sub- 
committee believes that increased HEW assistance to encourage 
continuing education and training programs for hearing specialists, 
clinical audiologists, and physicians is needed in order to improve the 
quality of the hearing care they provide. Similarly, state and local 
public health departments should be encouraged to provide greater 
hearing care to the elderly including a network of examination and 
treatment sites (pp. 40-41). 



XVI 



2. All people purchasing eyeglasses, hearing aids, and dentures should 
use consumer discretion to avoid abuses such as overpricing and 
unnecessary services (pp. 
The subcommittee recommends that all people purchasing medical 
appliances utilize consumer discretion to avoid overpricing and unnec- 
essary services so that the}^ will have eyeglasses, hearing aids, and 
dentures of the highest possible quality and the lowest possible price. 
The subcommittee has listed suggestions at the conclusion of the re- 
port. In addition, where appropriate, the federal government and the 
regional and local authorities should disseminate such information 
(pp. 41-43). 



MEDICAL APPLIANCES AND THE ELDERLY: UNMET 
NEEDS AND EXCESSIVE COSTS FOR EYEGLASSES, 
HEARING AIDS, DENTURES, AND OTHER DEVICES 

INTRODUCTION 

The well-being of millions of older Americans is dependent on their 
use of one or more medical appliances. Indeed, medical appliances are 
so important to these elderly Americans that it would be impossible 
for them to have meaningful lives of the quality that they have become 
accustomed to and that they deserve without them. For example, 
for many elderly people without necessary hearing aids, hearing loss 
becomes a frustrating disability which interferes with vocational activ- 
ities and social interactions, thus, increasing the severe emotional 
and social isolation that is associated with old age. Similarly, without 
necessary dentures, older people lose their ability to chew and digest 
foods that they desperately need to meet nutritional requirements. 
Finally, without necessary eyeglasses, elderly people lose essential 
visual contact with the world around them and grow more and more 
isolated from family and friends. In short, for millions of elderly 
Americans, medical appliances are essential to life itself. 

Because of the crucial importance of medical appliances, the Sub- 
committee on Health and Long-Term Care believes that the needs of 
the elderly for these health aids must be met. Presently, those needs for 
medical appliances are not being met. 

The subcommittee has found that millions of elderly Americans 
need medical appliances like hearing aids, eyeglasses, and dentures 
but do not have them because, in many cases, they cannot afford the 
high costs of these health aids. These costs are an enormous burden 
for all older Americans because they have, on the average less than 
half of the income of their younger counterparts. It is a particularly 
difficult burden for the one-third of the elderly bordering on or below 
the poverty level. As Nelson Cruikshank, President of the National 
Council of Senior Citizens, has pointed out, if elderly people cannot 
afford the medical appliances that they must have : 

They pay but not in dollars. They pay in the quality of life. Some cut down on 
food requirements. Some go without the proper type of shelter. Some cut off their 
social life. Many just do without (eyeglasses, hearing aids, and dentures) and fall 
back into more and more seclusion and live a restricted life because these appli- 
ances are not available to them as they should be. 

Despite the fact that large numbers of elderly people cannot afford 
the medical appliances that they so desperately need, neither vublic 
nor private health benefit programs have been sufficiently helpful to the 
elderly in this area. Medicare, for example, provides no coverage of 
necessary medical appliances. As the chart on page 2 indicates, 
Medicaid does cover some devices, but only for the poor of a small 
number of states and thus, it pays for only a small fraction of these 
costs. Finally, private health insurance policies rarely provide cover- 
age of medical appliances. The result of all this is that the elderly 
paid almost all of the $1.2 billion that was spent for medical appliances 
for the aged in 1975 out of their own pockets. When they are unable 
to afford to do so, in the words of Dr. Sidney Wolfe, Director of Public 



78-385 — 76 3 



(1) 



2 



Citizen's Health Research group, the only way out is to make im- 
possible choices. It is impossible for a senior citizen to decide whether 
or not they want to hear what goes on in the world or whether they 
want to eat. 

The choices which senior citizens are forced to make about medical 
appliances due to the inadequacy of health benefit programs are yet 
more "impossible" because of the financial burden that the elderly 
bear in other health areas. The cost that the elderly must pay for all 
types of health care, not just medical appliances, continues to sky- 
rocket. The average out-of-pocket cost paid by the elderly for health 
care has increased from $178 in 1966 to $415 in 1974. This increase has 
occurred despite the Medicare program, which now pays a lower per- 
centage (38 percent) of the medical bills of the elderly than when 
it began (46 percent). 

SELECTED MEDICAID SERVICES, STATE-BY-STATE 



Durable medical 

Totals Hearing aids Dentures Eyeglasses equipment 



Alabama Not piovided. . Not provided Provided with limits Provided with limits. 

Alaska du do do Do. 

Arizona 1 

Arkansas Not provided. . Provided with limits Provided with limits Do. 

California Provided do do Do. 

Colorado Not provided. . Not provided do Do. 

Connecticut Providod Provided with limits do Do. 

Delaware Not provided. . Not provided do Not provided. 

District of Columbia do Provided with limits do Provided with limits. 

Florida do.. Not provided Not provided Not provided. 

Georgia do Provided with limits Provided with limits Provided with limits. 

Guam. Provided 

Hawaii Not provided.. Provided with limits Provided with limits Do. 

Idaho ...do Not provided Not provided Do. 

Illinois Provided Provided with limits Provided with limits Do. 

Indiana do do do Do. 

Iowa do do do Do. 

Kansas do Provided no limits do Do. 

Kentucky Not provided. . Not provided do Do. 

Louisiana Provided do do Do. 

Maine Not provided.. Provided with limits do Do. 

Maryland do do do Do. 

Massachusetts Provided! do... do Do. 

Michigan Not provided do do Do. 

Minnesota Provided' do do Provided no limits. 

Mississippi Not provided. . Not provided do Not provided. 

Missouri do Provided with limits do Do. 

Montana.. Provided do do Provided with limits. 

Nebraska _. do do do Do. 

Nevada do do ..do Do. 

New Hampshire do Not provided do Do. 

New Jersey Not provided.. Provided with limits do Do. 

New Mexico Provided do do Do. 

New York... do do do Do. 

North Carolina Not provijed. _ do do Do. 

North Dakota Provided Provided no limits Provided no limits Provided no limits. 

Ohio do Provided with limits Provided with limits Provided with limits. 

Oklahoma Not provided. . Not provided do _. Do. 

Oregon. Provided Provided Provided Provided. 

Pennsylvania Not provided. . Provided with limits Provided with limits Provided with limits. 

Puerto Rico ..do Not provided Not provided Not provided. 

Rhode Island Provided Provided with limits Provided with limits Provided with limits. 

South Carolina Not provided. . Not provided do Do. 

South Dakota do do do Do. 

Tennessee do Provided with limits do Do. 

Texas do do do Do. 

Utah Provided do do.. Do. 

Vermont ..do Not provided Not provided Provided no limits. 

Virgin Islands ...do Provided with limits Provided with limits Provided with limits. 

Virginia do Not provided do Do. 

Washington do Provided with limits do Not provided. 

West Virginia do do do Provided with limits. 

Wisconsin.. do Provided no limits Provided no limits Provided no limits. 

Wyoming Not provided. . Provided with limits Provided with limits Provided with limits. 



1 Not applicable. 



3 



To make this situation yet worse, the elderly who are able to afford 
needed medical applicances are frequently the victims of abuses such as 
overpricing and unnecessary services. In the hearing aid industry, for 
example, there is conclusive evidence of misrepresentation, restraint 
of trade, price fixing, inadequate training of dealers, and ineffective 
licensing laws. Throughout the medical appliance area, the lack of 
standardization makes it difficult for older persons to make price 
comparisons between products. Also, the elderly often rely heavily 
on the advice of the medical equipment supplier in the selection of a 
particular item and the supplier may have little training and a strong 
interest in maximizing profits. 

Thus, there are two key inadequacies in the present delivery system 
of medical appliances to the elderly; high prices which keep people 
who need the devices from having them and widespread abuses 
against those who do purchase the devices. Clearly the time has come 
for increased federal assistance in this crucial area. This nation cannot 
continue to ignore the need of the elderly for high quality medical 
appliances at prices that they can afford. The people of this country 
cannot sit idly by as the cost of health care that is paid by the elderly 
continues to reach higher and higher levels. In short, the time has 
come for this nation to move ahead and provide more of the essentials 
of life to the elderly. 

The subcommittee believes that extending the optional Part B section 
of Medicare so that it would cover the cost of hearing aids, eyeglasses, 
and dentures is imperative in attempting to solve the problems of the high 
costs paid by the elderly for health care in general and medical appliances 
in particular. Yet the subcommittee emphasizes that any such in- 
crease in federal assistance represents only part of the solution. While 
it is necessary that Medicare benefits be extended, it is equally im- 
perative that any extension of benefits that is made not be done 
in such a way as to allow the inadequacies and abuses of today's 
delivery system of medical appliances to continue. 

For this reason, it is essential that two major reforms accompany 
the extension. First of all, the government should utilize large volume 
contract purchasing of eyeglasses, hearing aids, and dentures, as the 
Veterans Administration and other agencies now do, thus reducing the 
cost of medical appliances from the excessively high levels of the present. 
Second of all, a series of major safeguards are needed to protect the 
elderly consumers from the kinds of abuses that presently dominate the 
market. The subcommittee, based on its investigation of the needs 
and costs of medical appliances, believes that the extension of Part B 
of Medicare so that it would cover hearing aids, dentures, and eye- 
glasses, the use of contract purchasing, and the institution of safe- 
guards are all desperately needed by the elderly. The subcommittee 
therefore believes that legislation to accomplish these ends should be 
enacted by the Congress. 

Finally, in considering these issues, the subcommittee believes 
that it is especially important that the American people and the 
American Congress bear in mind one crucial idea; the most important 
level on which these problems and recommendations can be considered is 
the human level. This report should be viewed as a discussion of the 
crucial needs of people and not a collection of statistics with no 
meaning. In human terms, the high cost of medical appliances and 



4 



the widespread abuses mean that many of our 22 million elderly 
people, who have contributed more to the nation than any other 
segment of the population, are now suffering tremendous hardships. 
As the following remark by Doctor Robert Lytle of the American 
Dental Association demonstrates, when these hardships are looked 
at on a human level, it becomes clear that we must do all that we can 
to answer the needs of the elderly and to end the abuses that they 
now suffer in this area. 

If we are lucky, we will all grow old. But how frightening to grow old and not be 
able to see clearly, hear distinctly, or eat properly because we cannot afford the 
necessary medical appliances to aid our failing facilities. 



CHAPTER I— VISION CARE 



A. NEED FOR EYEGLASSES 

Vision care represents the most glaring example of both the great 
need of our nation's elderly for medical appliances and the inadequacy 
of the existing pricing and delivery systems at meeting that need. The 
size of that need becomes evident with an examination of the following 
statistics: First of all, older Americans suffer from chronic vision 
impairments more frequently than from any other ailment except 
arthritis. Second of all, since vision deteriorates with age, there are 
more cases of eye problems among the elderly than any other segment 
of the population. At the present time, over 20 million Americans over 
65, or 92% of our nation's elderly require and own eyeglasses or contact 
lenses. 1 Over 5 million of these people need new corrective lenses 
because the ones that they now have either do not help their sight or 
actually harm it. Countless additional elderly Americans need eye- 
glasses but do not have them. Tins vast need for proper glasses is 
especially critical because many eye diseases, such as glaucoma and 
senile cataracts, can lead to blindness if they are not detected and 
treated promptly. Since the rate of blindness among Americans over 
65 is over eight and one half times as great as the number in the 
under 65 population, it can be concluded that these crucial vision needs 
of the elderly are largely ignored. 

According to the National Center for Health Statistics, there are 
over 200 chronic vision impairments per 1,000 aged persons. Such 
conditions are most commonly reported in the South (whereas re- 
ported conditions ranged from 181.4 per 1,000 persons to 187.5 persons 
for the remainder of the country the reported prevalance in the South 
was 249.5), among the elderly in nonmetropolitan areas, and among 
the poorest old people. 

Both distance and near vision require correction as they deteriorate 
with age. Regarding distance vision, while only 19.6 percent of the 
total population have 20/70 uncorrected vision or worse, 51.8 percent 
of people 65-74 and 55.5 percent of persons 75-79 years of age have 
20/70 uncorrected vision or worse. Similarly, where the vision is 
corrected with eyeglasses or contact lenses, the number of persons in 
the general population with 20/70 vision or worse is 3.2 percent, where- 
as for persons 65-74, the percentage is 10.1 and for persons aged 75- 
79, the figure is 19.1 percent. 

For near vision the situation is worse. Over 35 percent of all persons 
have uncorrected vision of 14/49 or worse. For persons aged 65-74 
the figure is 85.8 percent. For corrected near vision, 6.3 percent of the 
general population had near vision of 14/49 or worse. 14.4 percent of the 
65-74 age group and 26.9 percent of the 75-79 age group had near 
vision of 14/49 or worse despite some corrective measures. 

1 Since less than one percent of all Americans over 65 wear contact lenses, this report 
will concentrate on eyeglasses in discussing vision care and corrective lenses. 



(5) 



6 



According to the National Center for Health Statistics, five million 
elderly people are wearing glasses which need correction* In many 
cases, elderly people have glasses which are so inadequate that they not 
only do not help them ; they may actually harm their vision. A survey 
of elderly people who wear glasses conducted by the National Center 
for Health Statistics provided documentation of this: 

Forty-four percent of the examinees were tested at distance with and without 
their glasses. This represents essentially all persons who stated they wore glasses 
for distance vision. Glasses improved acuity for 76 percent, while 19 precent tested 
the same with glasses as without, and five percent did better without glasses. 
******* 

Over half of the examinees (52 percent) were tested both with and without 
glasses for near vision. (An additional four percent stated they wore glasses for 
near work but did not bring them to the examining center.) Of those tested with 
glasses or contact lenses, 83 percent had improved acuities with correction, 14 
percent were unchanged, and three percent did less with than without their 
glasses. 

Finally, while no data is available, the subcommittee believes that 
in addition to the five million people who have inadequate glasses, 
countless more elderly people need glasses, but simply cannot afford to 
purchase them. 

In many cases, the consequence of not having proper glasses is that 
elderly people are mistakenly believed to be senile when in actuality 
thev are simplv unable to see necessary stimuli. A studv bv the 

mi . t JT mi •/ «y «^ 

Ebenezer Society, a leading Geriatrics Center in Minneapolis, Minn., 
has confirmed that in many cases, older persons may "have been 
inappropriately labeled mentally impaired as a result of unresolved 
vision needs." 

B. THE PRESENT DELIVERY SYSTEM OF GLASSES AND ITS ABUSES 

The subcommittee has found serious evidence of abuse of the rights 
and trust of consumers in the present delivery system of eyeglasses in a 
Xew York Department of Consumer Affairs survey. The study 
indicates that one out of five eye examinations given to their own in- 
vestigators (posing as typical consumers) by optometrists resulted in 
unnecessary prescriptions for eyeglasses. In addition to raising questions 
about the ethics of some of the surveyed optometrists, the large num- 
ber of unnecessary prescriptions demonstrates the need for minimum 
requirements for examinations. The latter conclusion is based on the 
fact that, in the survey, the optometrists who performed the least 
adequate tests generally were the ones who gave the incorrect 
prescriptions. 

In the study, eight Department of Consumer Affairs (DCA) staff 
investigators who did not need new glasses went to optometric estab- 
lishments selected at random throughout New York. The investiga- 
tors requested routine vision exams and did not complain of any 
sArmptoms. Needless to say, the investigators answered any questions 
that they were asked during the examinations truthfully. If the 
optometrists said that they needed eyeglasses, the investigators 
purchased them. The glasses were then examined by two DCA 
consultants who compared the investigator's vision with the pre- 
scribed lenses. They found that "erroneous prescriptions for unneeded 
eyeglasses were given by 11 of the 16 surveyed optometric establish- 
ments in 22 out of a total of 111 examinations." The following repre- 
sents one example of the prescription of unneeded eyeglasses that 
occurred in the study : 



7 



One investigator in a sworn affidavit, stated that when he went to an optome- 
trist he was told that he had 20-20 vision. The investigator stated that "after the 
optometrist shone a small flashlight into my eyes he informed me that my eyes 
were sensitive to light. He implied that this was an abnormal condition and told 
me that I needed dark glasses to correct this." The optometrist told him to select 
a pair of frames with the receptionist. When the investigator told the receptionist 
that he did not want to purchase the dark glasses, the receptionist responded that 
he had to purchase the glasses because the doctor said that he needed them and 
that he might as well purchase them now because he would need dark glasses 
sooner or later. 

One reason why so many unnecessary prescriptions were made in 
the study was that man}* of the eye examinations were made under 
inadequate conditions. For example, in 17 of the examinations, the 
optometiists projected improperly focused eye charts, so that those 
tested were unable to see the chart clearly. In 21 other cases, the 
liehtins; in the testing room was too bright for the chart to be read 
correctly. In most cases, these inadequate tests were the basis for 
prescriptions for eyeglasses that were in fact unnecessary. 

C. COST OF EYEGLASSES 

Information received by the subcommittee, as well as a survey 
conducted bv the subcommittee, have resulted in serious evidence of 
massive overpricing and enormous variance in the cost of eyeglasses. 
For example, the New York Consumer Service Society reported that 
''Xew Yorkers who purchased eyeglasses paid two and a half times (or 
250 percent more; in one place as in another for the same set of com- 
monly prescribed lenses in a standard frame." Virginia Long, the Xew 
Jersey Director of Consumer Affairs has charged that in her state there 
is a 300 percent variation in the cost of the same eyeglasses. 

In order to confirm these reports, the subcommittee conducted a 
survey of randomly selected firms selling eyeglasses retail in the 
Washington area. The firms provided the following prices for their 
least expensive eyeglass frames and the least expensive plastic and 
glass lenses : 



Lerrs, glass, Le-s, plastic, Cel. 1 + Col. 1 + 

Frames pair pair col. 2 col. 3 

(1) (2) (3) (4) (5) 



Firm A i 55. 25 $15.00 $20.00 $21.25 SZ6. 25 

Firm B 22.50 27.50 27.50 50.00 :.. r . 

FirmC 17.50 25. 00 27.50 42.50 45. CO 

Firm D 8.95 14.95 19.95 23.90 23.90 

Firm E 9.00 25. GO 30.00 34.00 39.00 



1 The quoted figure was between $6 and $6.50. The average of the 2 figures was used. 

This subcommittee survey demonstrates a 230 percent variance 
in the cost of identical eyeglasses with glass lenses and an almost 
200 percent variance in the cost of the identical eyeglasses with plastic 
lenses. 

The subcommittee believes, as does the Xew York Community 
Service Society, that ''Price variations of this magnitude cannot be 
explained away by differences from firm to firm in merchandise 
quality, overhead and wholesale costs. " 



8 



D. COVERAGE UNDER EXISTING HEALTH BENEFIT PROGRAMS 

Medicare covers virtually no op tome trie services. The 1967 Social 
Security Amendments excluded coverage of "e3 r eglasses, eye examina- 
tions for the purpose of prescribing, fitting, or changing eyeglasses, 
or any procedures performed (during the course of any eye examina- 
tion) to determine the refractive state of the eyes." 

Medicaid does provide coverage of the diagnosis and treatment 
of eye conditions. In addition, many states provide optometric serv- 
ices. For example, as of August 1, 1975, 15 states offered optometric 
sendees to people receiving federally supported financial assistance. 
Twenty-three more states, in addition to offering optometric services 
to these categorically needy people, also offered such services to the 
medically needy, people in public assistance and SSI categories who 
are financially eligible for medical but not for financial assistance. 

A number of state Medicaid programs do provide eyeglasses to the 
needy. Eleven states offer ej^eglasses to the categorically need}' and 
25 more states also offered eyeglasses to the medically needy. 

The tragic aspect is that given their very limited financial resources, 
states have been forced to cut from the Medicaid program desperately 
needed optometric services and e3 r eglasses. Other states have not 
dropped these services but have limited their coverage of vision care 
by imposing such restrictions as requiring copayment and providing 
e3^eglasses and optometric services only to children. Other restrictions 
have included a limit on the frequency of obtaining new prescriptions 
and eyeglasses and the amounts paid for eyeglasses, and the frequency 
of refractions and dispensing eyeglasses. 

In Michigan and Georgia, for example, optical services are pro- 
vided to children only. The Texas Medicaid program provides only 
one pair of eyeglasses for a 24 month period, with certain qualifica- 
tions, and limits refractions to once every year. In Maryland, different 
limits are imposed for children and adults, with children allowed 
to obtain new prescriptions more frequently. Maryland allows no 
replacement for lost or broken glasses. According to the acting director 
of the state Medicaid program in Michigan, costs for e3^eglasses are 
limited to the following amounts in that state; $35 for single vision 
glasses and $50 for bifocals and trifocals. In the District of Columbia, 
the Medicaid program pays the dispenser his wholesale price plus 
$10.50 as a dispensing fee. There is a dollar limit of $5 for plastic 
frames and $7 for plastic and metal frames. There is no limit on the 
price of lenses, which are purported to average about $12. The Texas 
Medicaid program uses a similar approach with some variations. 
Other states, such as Virginia, charge the patient $2 for a pair of eye- 
glasses, and $2 for any repair costing more than $5. 

Health insurance policies are even less helpful to the elderly in need 
of vision care than Medicare and Medicaid are. Such policies rarely 
cover any vision care services, according to the testimon}' before the 
Subcommittee of the nation's leading health insurance companies. 



CHAPTER II— DENTAL CARE 



A. NEED FOR DENTURES 

Dental problems such as tooth decay and periodontal disease are 
so widespread among the elderly that half of all persons over 65 
years of age are edentulous (without any natural teeth). While a 
majority of these people do have the dentures that they require, the 
inadequacy of the present pricing and delivery system of dentures 
and of the health benefit programs intended to meet such problems 
is revealed in the fact that according to the National Center for 
Health Statistics, 6.2 percent have neither natural teeth nor dentures 
and 30 percent have dentures which are ineffective and which require 
refitting or replacement. Additional proof of this inadequacy is the 
fact that the elderly, the population segment which most needs dental 
care, receives less dental care than the rest of the population. Fre- 
quently, this is due to the elderly being unable to afford the cost of 
dental care. These dental care problems are very serious for two 
reasons. The first reason is that persons who are without dentures for 
too long a time after they have had their teeth removed, may never 
be able to wear dentures when thev do get them. The second reason 
is that the lack of teeth or the use of faulty dentures frequently re- 
sults in changes in food selection due to chewing difficulties, and these 
changes can cause nutritional deficiencies. 

By the time persons in this country reach the 65 to 74 age group, 
an average of roughly 23 of their teeth are missing, decayed, or filled. 
The following table, which was compiled by the National Center for 
Health Statistics shows the number of decayed, missing or filled teeth 
among all adults in the United States. 

MEAN NUMBER OF DECAYED, MISSING, AND FILLED TEETH AMONG DENTULOUS ADULTS, BY SEX AND AGE: 

UNITED STATES, 1960-62 

Total DMF 

Sex and age 

BOTH SEXES 

Total, 18 to 79 years 

MEN 

Total, 18 to 79 years 

18 to 24 years 

25 to 34 years 

35 to 44 years ___ 

45 to 54 years ._ 

55 to 64 years 

65 to 74 years _ 

75 to 79 years _ 



WOMEN 



Total, 18 to 79 years. 

18 to 24 years 

25 to 34 years 

35 to 44 years 

45 to 54 years 

55 to 64 years 

65 to 74 years 

75 to 79 years 



teeth 


Decayed 


Missing 


Filled 


17.9 


1.4 


9.4 


7.0 


17.2 


1.5 


9.2 


6.5 


13.4 


2.2 


4.6 


6.6 


15.8 


1.8 


6.2 


7.8 


17.2 


1.3 


8.1 


7.8 


18. C 


1.3 


10.9 


5.8 


20.4 


1. 1 


14.7 


4.5 


22.3 


.8 


18.1 


3.5 


24.4 


.7 


21.7 


2.0 


18.5 


1.4 


9.6 


7.5 


14. 1 


2.0 


5.0 


7.2 


17.5 


1.6 


7.5 


8.4 


18.8 


1.3 


9.2 


8.3 


19.6 


1.1 


11.5 


7.0 


21.9 


.8 


14.8 


6.3 


22.8 


.5 


16.8 


5.5 


25.0 


.7 


20.1 


4.3 



Note: Filled teeth include only teeth with satisfactory fillings. Decayed teeth include not only teeth with caries but also 
filled teeth with carious lesions or defective fillings. Missing teeth include both missing and nonfunctional teeth. DMF is 
the total of these 3 categories. 3d molars are included in the count 



(9) 

7S-385 — 76 4 



10 



In addition to the problem of tooth deca} r , periodontal disease (a 
disease which affects the bone and tissue that support the teeth) is 
endemic among the aged. Like tooth decay, the prevalence of perio- 
dontal disease rises sharply with age, as can be seen from the following 
table which was compiled by the National Center for Health Statistics. 

PERCENT DISTRIBUTION OF ADULTS, BY STATUS OF PERIODONTAL DISEASE ACCORDING TO SEX AND AGE 

UNITED STATES, 1960-62 



Status of periodontal disease 

Without With periodontal disease 

periodontal 

Sex and age Total disease Without pockets With pockets 



BOTH SEXES 

Total, 18 to 79 years _ 100. 26. 1 48. 5 25. 4 

MEN 

Total, 18 to 79 years 100.0 20.9 49.0 30.1 

18 to 24 years 100.0 29.0 60.6 10.3 

25 to 34 years 100.0 26.3 51.7 22.0 

35 to 44 years 100.0 22.1 48.1 29.7 

45 to 54 years 100.0 15.0 48.1 36.9 

55 to 64 years 100.0 15.3 39.1 45.6 

65 to 74 years 100.0 5.6 36.0 58.4 

75 to 79 years 100.0 6.2 33.7 60.0 

WOMEN 

Total, 18 to 79 years 100.0 31.0 47.9 21.0 

18 to 24 years 100.0 36.8 53.6 9.6 

25 to 34 years ._ 100.0 37.6 50.2 12.3 

35 to 44 years 100.0 33.3 46.2 20.5 

45 to 54 years 100.0 26.6 43.7 29.6 

55 to 64 years 100.0 20.8 43.6 35.5 

65 to 74 years 100.0 15.2 52.0 32.8 

75 to 79 years 100.0 11.0 35.3 53.8 



The National Center for Health Statistics attempted to measure 
the severity of periodontal disease, in addition to its prevalence. The 
following table demonstrates that the severity of periodontal disease 
(measured by the periodontal index) also increases with age. 

AVERAGE PERIODONTAL INDEX OF WHITE AND NEGRO ADULTS, BY SEX AND AGE: UNITED STATES, 1960-62 
Sex and age All races White Negro 

BOTH SEXES 

Total, 18 to 79 years _ 

MEN 

Total, 18 to 79 Years 

18 to 24 years 

25 to 34 years 

35 to 44 years 

45 to 54 years 

55 to 64 years 

65 to 74 years 

75 to 79 years 

WOMEN 

Total, 18 to 79 years __ 

18 to 24 years 

25 to 34 years 

35 to 44 years _ ._ 

45 to 54 years _. 

55 to 64 years... 

65 to 74 years 

75 to 79 years 



1.13 


1.06 


1.60 


1.34 


1.28 


1.79 


.62 


.58 


.78 


.92 


.87 


1.30 


1.27 


1.22 


1.67 


1.62 


1.55 


2.06 


2.15 


2.00 


3.13 


2.50 


2. 47 


2.83 


2.91 


3.01 


2.16 


.93 


.85 


1.43 


.48 


.46 


.62 


.60 


.53 


.95 


.82 


.74 


1.30 


1.23 


1.11 


1.S2 


1.56 


1.39 


2.90 


1.62 


1.51 


2.03 


2.94 


2.41 


5.53 



11 



11,400,000 Americans over the age of 65 are edentulous as a result 
of tooth decay and periodontal disease. This figure represents 45.2 
percent of persons 65 to 74 and 59.8 percent of people over 75. The 
reason for this high rate of edentulousness is that the senior citizens 
of the present grew up in a time before the benefits of flouridation 
and other preventive measures were known. In other words, the high 
rate of edentulousness of today's elderly exists because extraction of 
teeth, which today is a last resort in nearly every instance, was far 
more common in the past when alternate tooth-saving procedures 
were not known. Thus, many of the dental problems which are so 
very acute among today's elderly, will become less serious among the 
elderly of the future. For example, data published by the National 
Center for Health Statistics demonstrates a significant decline in the 
number of edentulous elderly Americans from 1958 to 1971. As the 
following table indicates, for those between 65 and 74 there was a 
decline of 10 percent, while for those over 75 the decline was 7.5 
percent. 

PERCENT OF EDENTULOUS PERSONS IN THE POPULATION, BY SEX AND AGE: UNITED STATES, JULY 1357-JUNE 

1958 AND 1971 



Sex and age 



July 1957- 
June 1958 



1971 



BOTH SEXES 

All ages 13.0 11.2 

Under 15 years _ 

15 to 24 years ... .9 .3 

25 to 34 years 3.6 3.6 

35 to 44 years 9.6 9.3 

45 to 54 years 22.4 17.3 

55 to 64 years. 38.1 30.8 

65 to 74 years... _ 55.4 45.2 

75 years and over 67.3 59.8 

MALE 

All ages _ 11.9 10.1 

Under 15 years 

15 to 24 years .9 .3 

25 to 34 years 2.6 3.2 



Sex and age 



35 
45 
55 
65 
75 



Un 
15 
25 
35 
45 
55 
65 
75 



July 1957- 
June 1958 



1971 



to 44 years 8. 8 8. 2 

to 54 years 21.9 16.5 

to 64 years 35.9 30.5 

to 74 years 52.8 45.0 

years and over 62.4 56.3 

FEMALE 

All ages 14.1 12.2 

der 15 years 

to 24 years. .9 .3 

to 34 years 4. 5 4. 

to 44 years 10. 3 10. 4 

to 54 years 22.8 17.9 

to 64 years 40. 1 31. 1 

to 74 years 57.6 45.4 

years and over 71.0 62.2 



Additional statistics from the American Dental Association demon- 
strate that this decline will continue. These figures show that the 
rate of edentulousness is steadily declining among the younger age 
groups that will make up the elderly of the future. For example, a 
1960 survey indicated that 31 percent of those between the ages of 
30 and 39 were already wearing dentures or bridges. A 1975 survey 
indicated that the figure has dropped to 11 percent. 

Among the 11.4 million elderly Americans who are without natural 
teeth, the National Center for Health Statistics has reported some 
shocking statistics. First of all, 600,000 elderly Americans are without 
any teeth whatsoever; they have neither natural teeth nor dentures. 
Second of all, 350,000 edentulous people over 65 had dentures which 
were incomplete. In addition, the Department of Health, Education 
and Welfare has reported that almost one-third of the edentulous 
elderly, or 3.4 million people, have dentures which need to be replaced 
or refitted. With this in mind, it comes as no surprise to learn that 1.3 
million people over 65 had so much difficulty wearing these inadequate 
dentures that they never used them or wore them only part of the 
time. The large number of persons in need of dental care because 



12 



they have dentures which are so inadequate that they have difficulty 
wearing them, points out a special problem of the aged. According 
to an article by Dr. Jay W. Friedman appearing in Geriatrics 
Magazine, 

The average denture patient has a sore mouth, dissatisfaction with his chewing 
capacity, and the fear that his teeth will come loose at embarrassing moments. 
Many elderly persons have given up chewing with their dentures and use them 
only for appearance in social situations. Although temporary stability may be 
obtained by use of denture adhesives, it is very short lived and denture wearers 
find these powders and pastes literally distasteful. 

The seriousness of this problem should not be underestimated, for 
in addition to causing soreness, ill fitting dentures have even, in some 
instances, caused cancerous lesions, according to Dr. Friedman. 

All of the above statistics have demonstrated that the elderly have 
severe dental care problems; problems which are the results of years 
of inadequate dental care and which are much more serious than 
those of the population as a whole. Thus, it is particularly shocking 
to discover that elderly people use considerably fewer dental services 
and see dentists 33 percent less frequently than other segments of the 
population as the following chart indicates: 

PERCENT OF POPULATION WITH ONE OR MORE DENTAL VISITS WITHIN A YEAR OF INTERVIEW AND NUMBER 
OF DENTAL VISITS PER PERSON PER YEAR, BY AGE: UNITED STATES, JULY 1963-JUNE 1964 AND 1969 



Percent of population with Number of dental visits per 
dental visit within a year person per year 

July 1963- July 1963- 



Characteristic (age) June 1964 1969 June 1964 \ 1969 



All persons _ 42. 45. 1.6 1. 5 



Under 5 years 11.1 11.0 .3 .3 

5 to 14 years 54.9 58.8 1.9 1.8 

15 to 24 years 55.1 55.6 2.0 1.7 

25 to 44 years 48.5 49.5 1.9 1.6 

45 to 64 years 38.4 42.3 1.7 1.6 

65 years and over 20.8 23.2 .8 1.0 



The American Dental Association has provided information to the 
subcommittee which shows that 71.8 percent of the edentulous 
elderly population has not even visited a dentist within the past 5 
years. While in some cases this statistic reflects the fact that these 
people do not require the care of a dentist, in many cases it is simply 
due to the fact that elderly Americans, frequently poor and on fixed 
incomes, have ignored their need for proper dental care because 
of their lack of money. That millions of poor elderly Americans are 
neglecting their dental care needs because of the high cost, is apparent 
from the following table, which illustrates the fact that persons over 
65 with incomes of less than $3,000 visited the dentist only one fourth 
as often as elderly people with incomes in excess of $15,000. 

One reason why it is extremely important that elderly Americans 
receive the dental care that they require is that persons who are 
without dentures for a long time after having their teeth removed are 
frequently unable to wear dentures when they finally do get them. In 
the 1950's, an experimental program was undertaken to provide 
dental care in the Kansas City metropolitan area for the chronically 
ill and aged. The program's dental staff found that persons who had 
been without dentures for 6 or more years could not be fitted for 



13 



dentures. Persons who had been without dentures for 5 or 6 years 
were considered borderline. Those fitted for dentures within 5 years 
after becoming edentulous could usually be fitted. 

A second reason why it is extremely important that elderly Ameri- 
cans receive the dental care that they require is that the lack of teeth 
or the use of faulty dentures frequently means that an elderly person 
may be forced to choose foods that are easier to chew but lower in 
nutritional value. Edentulous people with faulty dentures or without 
any dentures tend to avoid foods like meats, raw vegetables, and 
fresh fruits because of the difficulty in chewing them. Yet, these 
foods are essential dietary ingredients for the elderly. For example, 
ascorbic acid (vitamin c) is particularly necessary to assure wound 
healing in the aged. However, because of chewing difficulty, it is not 
unusual for the elderly to have low intakes of the citrus fruits and 
fresh vegetables which are the natural sources of vitamin c. A study 
by the American Dental Association has confirmed the severity of 
this problem. The study showed that those people with the least 
chewing difficulty were able to consume the largest amounts of each 
of the nutritional elements. In short, edentulous people require high 
quality dentures in order to avoid dietary imbalance, borderline 
nutritional deficiencies, and even malnutrition. 

B. THE PRESENT DELIVERY SYSTEM OF DENTURES 

Because of the large number of dentists, eight out of ten Americans 
live in areas in which there is ready access to dental care services, 
according to the American Dental Association. Unlike the supply 
of plrysicians, the number of dentists per 100,000 people has remained 
virtually unchanged since 1960. Whereas the number of physicians 
per 100^000 increased from 136 per 100,000 in 1960 to 154 per 100,000 
in 1970, the number of dentists increased from 49.4 to 49.6 per 100,000 
during the same period. The Department of Health, Education and 
Welfare has projected an increase in dentists to 55.6 per 100,000 in 
19S0 as the following chart indicates. That increase would represent 
a 12 percent increase over 1970. 



ANNUAL ADDITIONS AND LOSSES TO THE SUPPLY OF ACTIVE DENTISTS, USING BASIC METHODOLOGY: ACTUAL 

1970 AND PROJECTED 1975 AND 1980 







Changes in supply Jan. 1-Dec. 31 




Year 


Jan. 1 


Net gains 


Graduate 
additions 


Losses from 
deaths and 
retirements 


Number active 
Dec. 31 


1970 










102,220 
126,170 


1980 


123,200 


2,970 


5,370 


2,400 



Source: BHRD, Division of Dental Health, 



While the projected increase in the supply of dentists is relatively 
modest, the Department of Health, Education, and Welfare has pro- 
jected far greater increases in the supply of allied dental workers. 
The following table shows the projected increases: 



14 



SUPPLY OF ACTIVE FORMALLY TRAINED SELECTED ALLIED DENTAL HEALTH PERSONNEL AND PERCENT CHANGE: 

1970; PROJECTED 1980 



[Basic educational preparation less than baccalaureate in level! 



Occupation 


Number of active formally 
trained personnel 

1970 1980 


Percent 
change 
1970-80 


Dental assistant _ 

Dental hygienists _ 

Dental laboratory technicians.. _ 


9,200 

._ 15, 100 

„ 1,600 


39,110 
34, 190 
7, 070 


325.1 
126.5 
341.9 



As can be seen, it appears that allied dental workers are being 
substituted for additional dentists, because of the large number of 
dental services that can be delegated. Since 1967, the number of 
patients seen per dentist has increased by 12 percent. A 1970 study 
showed that a dentist working with one assistant could be 36 percent 
more productive than one working alone, and five assistants could 
make a dentist 236 percent more productive. To some extent, how- 
ever, such increases in productivity are limited by State laws that 
specify the duties which can be delegated by dentists. Since 1970 
states have been active in amending dental practice acts to allow 
dentists to delegate duties to dental auxiliaries. In a report prepared 
b} r the Division of Dentistry of the Health Resources Administration, 
it was noted that the number of states allowing the delegation of 
duties to dental auxiliaries increased from 24 to 44, or from 47 percent 
of the states to 86 percent. The extent of delegation allowed tends to 
vary with the states. 

In addition to the dentist who takes the X-ra3 T s, makes the extrac- 
tions and impressions, and works with the aged person to determine 
the best possible fit, there are a large number of persons and organiza- 
tions who participate in supptying the elderly with dentures, including 
the manufacturers who produce the teeth and the supply houses who 
distribute the teeth and other materials to the laboratories. 

C. COST OF DENTURES 

The cost of dentures, like many other professional services for the 
elderly, varies widely. The cost, which includes the extraction of 
teeth, X-rays, the making of impressions, and the purchase of the 
dentures from the laboratory can vary from less than $500 to over 
$1,000 depending upon the dentist. However, the existence of a num- 
ber of large clinics specializing in dentures which provide the exact 
same services for as little as one fifth of these costs, represents evidence 
of overpricing. 

The Sexton Clinic in Florence, S.C., for example, provides dentures 
for substantially less than the average cost of $500 to $1,000. The 
following costs charged by the Sexton Clinic were provided by an 
employee of the clinic to the subcommittee. 

1. Extractions — $3 per tooth (medication such as anticoagulants 
is additional). 

2. Dentures — $50 (one style only which are made of acrylic). 
Teeth are extracted and dentures fitted on the same day at the 

clinic. The procedure begins at three o'clock in the morning and is 
over at approximately seven o'clock the same evening. All work is 
done by appointment. Many of the persons using the clinic are elderly 
and travel from retirement areas such as Florida to take advantage 



15 



of the low cost of having their teeth extracted and new teeth put in 
at the Sexton Clinic. The clinic operates two motels for those people 
traveling long distances. 

While the subcommittee has seen no basis for any such complaints, 
the South Carolina Dental Association, representing local private 
dentists, has been openly critical of the clinic and has alleged that 
they have received numerous complaints from patients of the clinic. 

Additional evidence of overpricing of dentures is the fact that the 
actual cost of the teeth and other materials which go into the making 
of dentures, represents no more than 5 to 10 'percent of the cost paid 
by the patient for his or her dentures. In most cases, 75 percent of 
the final fee goes to the dentist for his services while the remainder 
goes to the laboratory which makes the dentures. 

There has been a 284 percent increase in overall dental costs and a 
225 percent increase in per capita costs since 1960, as the following 
table shows: 





1960 


1965 


1970 


1975 


Percentage 
change 

1960-75 


Dollars (millions) 

Per capita ... _ 


$1,944 

10.65 


$2, 728 
13. 87 


$4, 473 
21.56 


$7, 500 

34. 62 


284 
225 



Dental costs have not increased as rapidly as overall national health 
expenditures or most other health costs have. For example, physicians' 
services costs have increased by 296 percent overall, and on a per 
capita basis by 234 percent. Overall hospital costs have increased by 
448 percent, and per capita hospital costs by 362 percent. Americans 
spent roughly one third as much on dental services in 1975 as we did 
for physician services; $22.1 billion for physician services and $7.5 
billion for dental services. 

Mueller and Gibson, in an article appearing in the June 1975 
Social Security Bulletin, reported on the cost of health services for the 
aged. The following table shows the cost of health services for the 
aged for the period from 1972 through 1974. 

ESTIMATED DENTAL CARE EXPENDITURES FOR THE AGED, FISCAL YEARS 1972 TO 1974 



Total 

(in millions) Per capita 



Year: 

1972 $375 $17.90 

1973 _ _ 402 18.85 

1974 429 19.58 



Dental costs for the aged increased by roughly 14 percent, approxi- 
mately the same as physician services, whereas overall costs of health 
care for the aged increased by roughly 23 percent. 

As a percentage of total health care costs and expressed in absolute 
terms, the aged spend considerably less for dental care than does the 
remainder of the population. In 1975, the total population spent, 
or had spent on their behalf, nine percent of total national health 
expenditures on dental services. The aged spent, or had spent on their 
behalf 1.6 percent of total national health expenditures. This lower 
expenditure is not the result of less need, however; it is the result 
of the greater percentage of poverty among the elderly. 



16 



D. PAYMENT FOR DENTAL SERVICES UNDER MEDICAID, MEDICARE, 
AND OTHER HEALTH BENEFIT PROGRAMS 

Dental services are optional under the requirements of the Medicaid 
program. Thus, the 4,232,550 aged people who are Medicaid eligible 
can receive dental care if they are lucky enough to live in a state which 
has opted to provide dental services under the Medicaid program. In 
December of 1974, 41 states offered some kind of dental care as part 
of their Medicaid programs. However, over the past 2 years, a number 
of state governments have cut back or eliminated many of their op- 
tional Medicaid services in order to reduce expenditures. The result 
of this is that by January 1976, only 36 states offered dental services 
as part of their Medicaid program (11 of those states covered dental 
services only to the categorically needy, while 25 states also provide 
coverage to the medically needy). This situation may continue to 
grow worse, leaving even more poor aged people without adequate 
dental care, as three more states (Ohio, Connecticut, and Illinois) are 
considering eliminating dental services from their Medicaid programs. 

Medicare is even less helpful to the elderly in need of dentures but 
without the money to pay for them. Under Medicare, dental care is 
authorized only for surgery related to the jaw or any structure con- 
tiguous to the jaw or to reduce a fracture of the jaw or any other facial 
bone. Medicare provides no coverage for the routine dental services 
that are so badly needed by the elderly. Just how limited Medicare's 
coverage of dental services is can be seen from the fact that Medicare 
reported spending no money for dental care during 1975, according to 
the Mueller and Gibson study of health costs for the aged. 

As for health insurance policies, the subcommittee has found that 
such policies are generally similar to Medicare in that they provide no 
coverage of routine dental services. In fact, dental costs are the least 
insured major health cost in the United States. It is estimated that 
roughly 10 percent of all Americans have dental insurance. Dental 
insurance, however, is the fastest growing line of health insurance. 
Between 1962 and 1974 dental insurance coverage increased b}^ over 
3,300 percent. The following table shows the numbers and percentage 
of the United States population covered by health insurance, including 
dental insurance. 



17 



ESTIMATES OF THE NET NUMBER OF DIFFERENT PERSONS UNDER PRIVATE HEALTH INSURANCE PLANS AND 
PERCENT OF POPULATION COVERED, BY SPECIFIED TYPE OF CARE, 1962-74 



Physicians' services 

Pre- 



Hospital Surgical In-hospi- ratory home Dental (out of duty nurse home 
End of year care services tal visits visits visits C3re hospital) nursing service care 



Number (in thousands) 



1962 120, 800 120, 528 (0 65, 671 O) 1, 006 47, 907 46, 143 43, 203 4, 975 

1965 O) 0) 0) 79,500 0) 3,100 53,200 56,000 60,100 9,900 

1966 (») O) (i) 90,000 O) 4,227 65,544 68,722 79,004 17,814 

1967 145,454 142,082 0) 92,480 0) 4,679 71, 201 76,080 81,771 18,754 

1968 (i) (i) 128,174 97,703 0) 5,821 79,280 83,485 90,523 19,046 

1969 0) 0) 133,914 125,002 (') 8,510 89,805 91,211 100,343 28,044 

1970... 154,253 150,001 145,589 142,441 101,970 12,210 100,966 100,235 106,882 32,392 

1971 O) O) 148,514 145,207 (i) 15,348 105,985 104,730 110,215 33,636 

1972 155,253 152,651 149,734 149,444 0) 17,904 111,374 108, S59 115,904 45,400 

1973 0) (i) 153,461 152,797 0) 21,625 124,971 118,805 122,688 69,152 

1974 163,393 159,518 155,022 153,017 125,183 33,297 141,755 141,157 135,687 69,840 



Percent of civilian population 



1962 70.0 65.0 O) 35.0 (0 0.5 25.0 25.0 23.0 3.0 

1964 O) O) (i) 41.2 O) 1.6 27.6 29.0 31.2 5.1 

1966 (0 (0 O) 48.0 0) 2.2 33.7 35.0 40.6 9.2 

1967 73.9 72.2 47.0 (0 2.4 36.2 38.7 41.5 9.2 

1968 0) 0) 64.5 49.2 0) 2.9 39.9 42.0 45.5 9.6 

1969 (0 0) 66.6 62.2 4.2 44.7 45.4 49.9 14.0 

1970 75.9 73.9 71.7 70.2 50.2 6.0 49.7 49.4 52.6 16.0 

1971 (i) 0) 72.3 70.7 0) 7.5 52.1 51.0 53.6 18.8 

1972 74.9 73.8 72.2 72.1 0) 8.6 53.7 52.6 55.9 21.9 

1973 0) 0) 73.4 73.1 (0 10.4 59.8 56.9 58.7 33.1 

1974 77.6 75.7 73.6 72.7 59.4 15.8 67.3 67.0 64.9 33.2 



1 Data not available. 



Payment for dental services through public programs has also 
increased rapidly. The following table shows the growth in public and 
private payments for dental services. 



Percentage distribution by 
source of funds 

Total (in 

millions) Private Public 



Fiscal year: 



1950 _ $940 100.0 

1955 1,457 100.0 

1960 1,944 99.8 0.2 

1965 _ _ 2,728 98.8 1.2 

1970 4,473 95.3 4.7 

1971 4,908 95.0 5.0 

1972 5,342 94.8 5.2 

1973 5,767 94.6 5.4 

1974 _ 6,200 94.5 5.5 



In 1975, the cost of dental services was less than one percent of total 
public health program costs, The following table shows the increases in 
dental costs for public programs for the period from 1973 to 1975. 



18 



DENTAL COSTS UNDER PUBLIC PROGRAMS 
[In millions] 





1973 


1974 


1975 


Tntal 


^391 A 


*777 9 




Titlp IY 

Veterans' Administration... 


??n A 
55.2 


44.9 


OJ/. 1 

51.4 


Other 


45.8 


29.5 


26.3 


Federal 


217.7 


215.3 


254.8 






Title IX 

Veterans' Administration. 

Other 


119.6 

55.2 

42. 9 


144.7 
44.9 
25.7 


180.7 
51.4 
22.7 


State .... 


103. 8 


117.5 


160.1 


Title IX _ 

Other 


100. 9 

2.9 


113.7 
3.8 


156.5 
3.6 



For 1974, the last year for which data for both private dental health 
insurance and public programs is available, dental costs met by third 
party coverage was roughly $1.2 billion. 



CHAPTER III— HEARING CARE 



A. NEED FOR HEARING AIDS 

Over one half of all persons 65 years of age and over suffer from 
impaired hearing according to the Federal Council on the Aging and 
the American Speech and Hearing Association. For 8 percent of the 
elderly, the hearing impairment is so serious that they are unable to 
hear words that are spoken in a normal voice. For millions of elderly 
Americans, the solution to these problems is the use of a suitable hear- 
ing aid. Yet, in attempting to purchase needed hearing aids, the elderly 
must confront inadequate regulation of hearing aid sales, excessively 
high prices, and a virtual lack of coverage under Medicaid, Medicare, 
and other health benefit programs. 

Hearing impairment takes a variety of forms. The first form it can 
take is an inability to hear speech and other sounds loudly enough. 
This is referred to as a loss in hearing sensitivity or simply a hearing 
loss. A second form of hearing impairment is an inability to hear 
speech and other sounds clearly even though the sounds are sufficiently 
loud. What is heard may be similar to garbled speech from a radio with 
a broken speaker. This is referred to as an impairment in speech 
discrimination. 

Many hearing impairments are subtle in nature and difficult to 
recognize. A mild hearing loss or a loss in hearing sensitivity for high 
frequency sounds may not be noticeable except under adverse listening 
conditions such as when the background is noisy or when the sound 
source is some distance away. A high frequency hearing loss may make 
it difficult for a person to differentiate between words that are the same 
except for differences in high frequency consonant sounds like f, s, or 
th. These sounds are often unheard or heard hi a distorted way by 
people with high frequency hearing losses. Thus, words like fit and sit, 
or math and mass, are frequently confused. 

The results of the most recent (1971) National Health Suiwv on 
hearing impairments indicate that there are 13.2 million people over 3 
years of age and living outside of institutions, who had a hearing 
impairment of some kind in one or both ears. Of these, 6.2 million had 
good hearing in one ear and could usually function as well as people 
with normal hearing. About 60 percent of those with bilateral hearing 
problems reported that while they had some difficulty hearing, they 
could usually hear words spoken in a normal voice. However, the sur- 
vey demonstrated that the remaining 2.4 million Americans had much 
more serious hearing impairments and were usually unable to hear 
words spoken in a normal voice. 

The likelihood of having a hearing impairment rises sharply with 
increased age. The percentage of the population with hearing problems 
in one or both ears is shown in the following table. 

(19) 



20 



Percent of Number 



Age age group (thousands) 



3 to 16 years _ _ 1. 62 905 

12 to 24 years. __ 2.65 723 

25 to 44 years _ _ _ _ 4.47 2,118 

45 to 64 years 10.00 4,178 

All ages _ _ 6.90 13,228 



Of the 5.3 million elderly people who had a hearing impairment, 3.3 
million (17.3 percent of the aged) had a problem with both ears. The 
most serious problem is that 1 .5 million elderly Americans (7.9 percent 
of the aged) were simply unable to hear words that were spoken in a normal 
voice, as the following table indicates. 

TABLE 1.— NUMBER OF PERSONS AND NUMBER OF PERSONS PER 1,000 POPULATION FOR PERSONS 3 YR OF AGE 
AND OVER WHO REPORTED HEARING PROBLEMS WITH ONSET OF HEARING LOSS AT ANY AGE, BY SPEECH COM- 
PREHENSION GROUP, SEX, AND AGE: UNITED STATES, 1971 

[Data are based on household interviews of the civilian, noninstitutionalized population] 



Persons 

Persons with bilateral hearing problems who Persons 

All reported who 

persons At best Can hear Can hear Persons to did not 
who can hear words words with response respond 
reported words shouted spoken in problems to self- to self- 
hearing shouted across a normal in only rating rating 
Sex and age problems Total i in ear a room voice one ear scale scale 



All ages 3 years and over 13,228 6,414 707 1,740 3,878 6,225 336 253 



3 to 16 years. 905 394 37 114 240 423 61 2 27 

17 to 24 years 723 214 2 13 49 148 462 2 33 2 15 

25 to 44 years 2,118 615 46 109 452 1,377 66 60 

45 to 64 years 4,178 1,845 135 421 1,262 2,166 88 79 

65 years and over 5,304 3,347 475 1,048 1,777 1,798 88 72 



1 Includes 89,000 persons who did not respond to Gallaudet Scale. 

2 Indicates estimate has a relative standard error of more than 30 percent. In general, the relative standard error will be 
less than 30 percent when the population estimate is greater than 35,000. 

Source: National Center for Health Statistics: Persons with Impaired Hearing, United States, 1971. National Survey, 
Series 10, No. 101. 

According to the National Health Survey, slightly over a million 
aged people with hearing impairments were using hearing aids. For 
example, many elderly people with sensorineural hearing losses (a 
type of hearing impairment related to the nerves) were helped by the 
sound amplification of a hearing aid. According to Dr. Blue Carstenson 
of Carstenson and Associates, in many cases, the use of hearing aids 
ends the "isolation, degradation, and loneliness" of many older 
people who might otherwise be mistakenly "thought to be practically 
senile." 

On the other hand in some cases such as profound hearing loss, a 
person cannot hear speech clearly even with the use of a hearing aid 
and may receive only limited benefit or no benefit from the use of one. 
In these cases, medical treatment, such as surgery, is necessary to 
correct the hearing loss. 

B. THE PRESENT DELIVERY AND PRICING SYSTEM OF 
HEARING AIDS AND ITS ABUSES 

Because of a great deal of public alarm, the delivery system and 
pricing of hearing aids has been the subject of numerous investigations. 
In October 1973, the Retired Professional Action Group (RPAG), a 



21 



nonprofit consumer advocacy group, undertook a detailed study of the 
hearing aid delivery system and published its findings in a report 
entitled "Paying Through the Ear: A Report on Hearing Health Care 
Problems. " At approximately the same time this report appeared, the 
Subcommittee on Consumer Interests of the Elderly of the Senate 
Special Committee on Aging held hearings on "Hearing Aids and 
Older Americans." In May 1974, an Intradepartmental Task Force 
was established within HEW to examine the issues described in the 
RPAG report and the Senate Hearings. The Task Force report, 
entitled "Final Report to the Secretary on Hearing Aid Health Care," 
was published in July of 1975. In October 1975, a report was published 
by the staff of the Permanent Subcommittee on Investigations of the 
Senate Committee on Government Operations. The conclusion of these 
studies and of the investigation of the Subcommittee on Health and 
Long-Term Care is that there are several serious abuses which demand 
correction in the way that hearing aids are sold. 

One of the most crucial issues that has been brought out of these 
investigations is that, as it is presently constructed, the hearing aid 
delivery system in the United States fosters a clear and continuing 
conflict of interest that pits the financial interests of the seller against 
the health and economic interests of the buyer. That is, at the present 
time, the profit orientation of the hearing aid dealer may cause him 
to sell a hearing aid to a person who has not been examined by a 
doctor and who might not need the expensive device. For example, a 
survey of hearing aid dealers in the District of Columbia that was 
made by the National Council of Senior Citizens showed that 27 
percent of the dealers recommended the purchase of unnecessary 
hearing aids. 

The subcommittee strongly favors, as a solution to the problem of 
the sale of unnecessary aids, a requirement that a person purchasing a 
hearing aid must first acquire a medical clearance from a physician, 
preferably a hearing specialist. 

On April 21, 1976, the Food and Drug Administration proposed 
regulations, that would, in general, prohibit the sale of a hearing aid 
to a patient before he has been examined by a physician. Patients 
who are age 18 or older would be permitted to waive the medical 
examination if the seller determines that none of the following otolog- 
ical symptoms of a medical malfunction are evident at the time of the 
sale : 

1. Visible congenital or traumatic deformity of the ear. 

2. History of active drainage from the ear within the previous 
90 days. 

3. History of sudden or rapidly progressive hearing loss within 
the previous 90 days. 

4. Acute or chronic dizziness. 

5. Unilateral hearing loss of sudden or recent onset within the 
previous 90 days. 

6. Audiometric air-bone gap equal to or greater than 15 dB 
(ANSI) at 500 Hz, 1000 Hz, and 2000 Hz. 

7. Visible evidence of cerumen accumulation or a foreign body 
in the ear canal. 

A 60-day period was provided for comments on the proposed regula- 
tion. At the present time, the Food and Drug Administration is 
analyzing those comments before issuing the regulations. 



22 



The subcommittee believes as does the American Speech and Hear- 
ing Association (ASHA) and others that the waiver loophole in the 
proposal represents a "double standard" in requiring an examination 
by a physician for hearing aid purchasers who are under 18, while 
permitting older people to waive the examination in most cases. Those 
who support the waiver argue that it is unnecessary because of such 
factors as the inconvenience of securing medical assistance in rural 
locations and religious beliefs which preclude consultation with a 
physician. 

The subcommittee rejects this approach of using a waiver. It favors 
an alternative approach of granting exemption to those people who 
, deserve them and requiring everyone else, regardless of age to receive 
a medical examination before purchasing the hearing aid (see pp. 40- 

41 )- 

The various investigations of the hearing aid industry have brought 
out other serious issues in addition to the need for a medical clearance 
requirement. One such issue is the need for adequate training of 
hearing aid dealers. Top quality instruction is essential because a 
dealer can only be competent if he or she has received such training. 
At the present time, the National Hearing Aid Society (NHAS) is the 
only organization offering a national instruction program for dealers. 
Most of the licensed hearing aid salesmen in the United States have 
taken this course of instruction which consists of 20 home study 
lessons. Yet, a 1975 review of this course by representatives of the 
Veterans Administration (which has provided hearing aids to veterans 
for 30 3^ears), the American Council of Otolaryngology, and the 
American Speech and Hearing Association has severely criticized the 
NHAS home study course. The representatives of the Veterans 
Administration concluded that the course was "not only inadequate but 
potentially dangerous" '. The VA continued, saying that, 

It is dangerous in the same way that "quack" medicine is dangerous * * * It 
^ postpones or prevents adequate evaluation, diagnosis, and treatment of hearing 
loss and its accompanying pathology. Some of those pathological entities are 
life-threatening and require immediate and aggressive medical or surgical treat- 
ment. 

Similarly, the representatives of the American Council of Otolaryn- 
gology concluded that, 

* * * the Basic Home Study Course of the National Hearing Aid Society * * * is 
"far too technical and beyond the scope of the simple salesman to comprehend in 

any effective manner. Most of the material has been written for professionals with 
college and post-graduate education. 

Finally, the American Speech and Hearing Association, the national 
audiologists' group, concluded that, 

* * * a hearing aid dealer would not be competent, as a result of completing this 
course, to accurately evaluate hearing. Because of its extremely superficial nature 
and because it approaches the subject in a purely descriptive rather than interpre- 

. tative manner, the hearing aid dealer who completes the course would still be 
ill-prepared to make the kinds of objective professional judgments and recom- 
mendations necessary for the satisfactory and ethical rehabilitation of patients 
with hearing impairments. 

One solution that is under consideration to the severe inadequacy of 
the education received by most hearing aid dealers would be strong 
state licensure requirements to insure that hearing aid dealers meet 
a set of minimum qualifications. 

Eleven states now have no such laws at all. In the other 39 states, 
the laws that have been enacted are frequently of only limited effective- 



23 



ness. The best example of this is the fact that nearly 50 percent of the 
licensed hearing aid dealers in the United States have never taken 
any kind of licensing exam. Instead, the}^ have been "grandfathered" 
into licenses because they had been dealers prior to the enactment of 
these laws. Even more serious, is the conclusion of the staff of the 
Permanent Subcommittee on Government Operations that, "For the 
most part, control of the licensing boards rests in the hands of the 
dealers. In effect they regulate themselves." 

In view of the virtual lack of oversight and scrutiny of the hearing 
aid industry, it is no surprise to learn that the Federal Trade Com- 
mission, the Food and Drug Administration, and numerous Congress- 
men and Senators have reported receiving hundreds of complaints of 
abuses in the industry. There have been numerous charges of false 
advertising and misleading promotional practices associated with the 
sale of hearing aids. In addition, there are numerous reports of high, 
pressure door-to-door sales, misrepresentation of the expected benefits 
of wearing a hearing aid, and misleading statements about "techno- 
logical innovations." As the report by the Permanent Subcommittee 
on Investigations stated, 

Many dealers who were complained against appeared to lack a strong sense of 
ethics or a degree of competence sufficient to evaluate the cause of hearing loss, 
to provide the proper hearing aid if one was indicated, or to refer the client to a 
doctor specializing in diseases of the ear. 

The Federal Trade Commission is striving to wipe out these abuses 
and to end the misrepresentation that is so commonplace in the 
hearing aid delivery system. For example, the FTC has conducted a 
broad investigation which has culminated in complaints against six 
major hearing aid manufacturers. The complaints alleged that the 
manufacturers had engaged in false advertising, supplied false ad- 
vertising materials to their dealers and retailers, and had participated 
in other unfair and deceptive acts and practices. All six manufacturers 
were charged with falsely representing in their advertising that they 
merchandise a hearing aid which is a new invention or involves new 
model features or new engineering or scientific concepts; that their 
hearing aids will be beneficial to persons with a hearing loss, regardless 
of the type or extent of loss; and that their hearing aids will enable 
persons with a hearing loss to distinguish or understand speech sounds 
in noisy or group situations. The manufacturers were also charged 
with advertising claims when there was no reasonable basis for doing 
so and failing to disclose the fact that many persons will not receive 
any significant benefit from the use of a hearing aid. 

In addition to these misrepresentation charges, the Federal Trade 
Commission also filed other complaints against five of the largest 
hearing aid manufacturers, alleging that they had maintained a system 
of exclusive territories, restrained trade, fixed prices, and intimidated 
and coerced dealers to handle only their own brand of hearing aids 
and to exclude competing brands. According to the FTC, because of 
these practices, in some areas a particular dealer frequently had a 
virtual monopoly in the sale of hearing aids and intraband competition 
was eliminated. The result of this was an increase in retail prices. While 
complaints against two firms are still pending, three of the manufac- 
turers have agreed to consent order. 

Because of all of these abuses, the Federal Trade Commission has 
recently proposed a Trade Regulation Rule for the hearing aid in- 



24 



dustry. The proposed rule, which is similar to the recommendation 
of the HEW Intradepartmental Task Force, would require compliance 
with the following provisions: 

1. A buyer has the right to cancel the purchase of a hearing aid 
within 30 days after delivery and pay only certain limited cancel- 
lation charges for a 30-day rental, including any custom ear mold 
delivered, and a 30-day supply of batteries. 

2. A seller has the right to grant buyer more extensive rights 
than those mentioned in the Trade Regulation Rule. 

3. Manufacturers are required to disclose the following material 
fact in any advertisement which makes a performance claim for 
a hearing aid: Many persons with a hearing loss will not receive 
any significant benefit from any hearing aid. 

4. Certain representations concerning hearing aids, such as in- 
accurate claims by dealers that a retail outlet is actually a 
governmental, public service, or nonprofit medical, educational, or 
research establishment, are prohibited. 

5. Certain selling techniques, such as visits to potential buyers 
for the purpose of inducing a sale without the prior consent of 
potential buyers, are prohibited. 

Additional reform proposals have been made by the Food and Drug 
Administration. Besides the previously mentioned medical-clearance 
requirement, the FDA has poposed a hearing aid regulation which 
would require that certain instructions, warnings, and other informa- 
tion be provided to the hearing aid purchaser. The proposed regulation 
would require labeling and include the statement that a hearing aid 
will neither restore normal hearing nor prevent or improve organic 
conditions resulting in hearing impairment. 

It is interesting to note that the National Hearing Aid Society, 
representing hearing aid dealers, has denied the abuses that have been 
documented by the FDA and FTC. In a letter to the subcommittee, 
the NHAS has taken the position that despite the allegations to the 
contrary and the FDA and FTC view that new regulations are needed, 
the present delivery system is working satisfactorily. The NHAS has 
argued that, "Most charges and accusations about the present hearing 
aid delivery system have not been documented by reliable research." 
Furthermore, the NHAS claims that its own national survey directly 
contradicts the criticism. For example, the 1974 survey shows that 
only 33 (IS percent) of the 1S4 hearing aid users studied reported 
having trouble and only four of these were difficulties which the hearing 
aid dealer was unable to solve. 

Given the widespread abuses that have been documented in the 
hearing aid industry, it is understandable that the Subcommittee 
has found that hearing aid costs are excessively high and a formidable 
barrier to the millions of elderly who desperately need hearing assist- 
ance. The rteail price of most hearing aids ranged from $300 to $450 
in 1972. The subcommittee believes that these high costs represent 
additional evidence of overpricing because these retail prices are over 
two and a half times the wholesale price. Further documentation that 
these prices are higher than need be, comes from the fact that the Vet- 
erans Administration, through its distribution system, has been able 
to provide hearing aids to those eligible for only $205 each (see 
Chapter V, delineating "Contract Purchasing"). The National Hearing 
Aid Society has defended this high mark-up and claims that it is due 



25 



to the fact that dealers supply a variety of other services, such as 
audiological tests, hearing and fitting, counseling about aid use, and 
maintenance in addition to the actual hearing aid. 

The subcommittee believes that an open hearing aid industry is a 
vital prerequisite for lower costs to elderly consumers. The subcom- 
mittee is very concerned about the fact that, while there are about 
50 manufacturers who sell hearing aids domestically, most of them 
have nowhere near the market control of the four largest manufac- 
turers, who accounted for 50 percent of the dollar value of shipments 
in 1970, or of the eight largest manufacturers, who accounted for 
approximately 70 percent of shipments. 

C. PAYMENT FOR HEARING AIDS UNDER EXISTING 
HEALTH BENEFIT PROGRAMS 

The subcommittee has found that existing public and private health 
benefit programs provide virtually no coverage of necessary hearing 
services to our nation's elderly. Medicare, for example, does not pay 
for either hearing aids or hearing aid examinations. Similarly, the 
Medicaid program provides no coverage of hearing aids for the 
elderly in 39 states. Finally, present health insurance policies rarely 
provide any coverage of hearing aid costs. In short, the elderly, with 
the exception of those who are Medicaid eligible and lucky enough 
to live in one of the 11 states that does provide coverage, are forced 
to pay the excessively high costs of desperately needed hearing aids 
out of their own pockets. 

CHAPTER IV— PROSTHETIC DEVICES AND OTHER 
DURABLE MEDICAL EQUIPMENT 

A. EXCESSIVE MEDICARE PAYMENTS FOR 
OVERPRICED PACEMAKERS 

Hearing aids, dentines, and eyeglasses are not only cases*bf medical 
appliances that cost too much for the millions of elderly people 
who need them. There are numerous other medical appliances of 
which this fact is true. 

One of the most expensive prosthetic devices (taking the place of a 
part of the bod}0 is the pacemaker. According to Dr. Sidney Wolfe, 
Director of the Public Citizen's Health Research Group, the actual 
production cost of a pacemaker is no more than "several hundred 
dollars." Yet, the current purchase price of the most commonly used 
pacemaker is a significantly higher amount, $1,300.00, according to 
the Health Research Group. Since Medicare does provide coverage 
for pacemakers purchased by the elderty, it is federal dollars that are 
paying for this excessively high markup in the price of pacemakers. 
The reason for this high markup is that: 

Price is not likely to become an important competitive element. The pace- 
maker is a vital device and a doctor bases his decision on confidence in the prod- 
uct rather than on price. Since Medicare pays for most pacemakers, the patient is 
also not concerned with the price. Thus, the demand for pacemakers is somewhat 
inelastic, providing little, if any, incentive for manufacturers to cut prices. 1 



1 From the Research Dept. of Smith, Barney, and Company, New York. 



26 



In other words, rather than investigate the non-competitive pricing 
of pacemakers, the Department of Health, Education and Welfare, 
which is responsible for administering the Medicare program has 
continued to ignore the high cost of pacemakers and to spend $200 
million of the taxpayer's dollars over the last 11 years on the over- 
priced devices. This is a violation of the Social Security Act (see 
1814b and 1861v) which authorizes Medicare to pay only 1 'reasonable 
costs" or ' 'customary charges" for these devices. The Subcommittee 
condemns this fraud and is particularly shocked to find that the above 
explanation for the high price of pacemakers has been openly used 
hy Smith, Barney and Company, a Wall Street firm, in order to 
encourage investment in Medtronics, a pacemaker manufacturer 
which accounts for about 60 percent of U.S. pacemaker sales. Because 
of this non-competitive pricing, Medtronics has had profit increases 
of 30 to 50 percent during each of the last 5 years, according to the 
Health Research Group. 

B. UNNECESSARY MEDICARE PAYMENTS FOR DURABLE 
MEDICAL EQUIPMENT ITEMS 

In addition to pacemakers, the subcommittee has found numerous 
other examples of medical appliances, such as hospital beds, crutches, 
wheelchairs, and dialysis equipment which are covered by Medicare 
and for which Medicare is pa} r ing excessively high amounts. This 
situation continues despite the fact that the 1972 Medicare amend- 
ments, Public Law 92-603, contained provisions to end these excessive 
payments. The Department of Health, Education and Welfare has 
not yet implemented those provisions. 

Durable medical equipment (e.g. hospital beds, crutches, wheel- 
chairs, and dialysis equipment) which is furnished to a Medicare 
patient for use in his or her home is covered under Part B of the 
Medicare program. If the equipment meets the program's definition 
of "durable medical equipment", is appropriate to the patient's 
condition, and meets the standard Part B deductible and coinsurance 
requirements, Medicare will pay SO percent of the cost of renting or 
purchasing the device. The choice of whether to rent or purchase the 
equipment is up to the individual who is receiving the coverage. When 
the equipment is rented, payment is made monthly on the basis of 
reasonable rental charges. When the device has been purchased by 
the elderly person, Medicare will make payment either in a lump 
sum for an inexpensive appliance or in monthly installments for a costly 
one. 

Since Medicare pays the cost of durable medical equipment whether 
it has been rented or purchased by the beneficiary, it frequently pays 
for the least economical way to provide the equipment to the elderly. 
The result is an estimated loss to the government of $9.5 million each 
year. Examples of this waste of taxpayer dollars have been reported 
by the New York Times. It cited the cases of a wheelchair that 
cost $168 to purchase, being rented for a total cost of $1,080, and a 
respirator that would have cost $396 to purchase being rented for 
$1,932. Additional documentation of this abuse has come from a 
1972 General Accounting Office report to the Congress entitled "Need 
for Legislation to Authorize More Economical Ways of Providing 
Durable Medical Equipment Under Medicare." The report demon- 



27 



strated that Medicare patients often rented durable medical equipment 
even when the periods of need, as estimated by their physicians, were 
long enough to justify purchase. 

During GAO's review of five insurance carriers in four states, GAO 
analyzed a statistical sample of patients' claims selected from the 
claims of the 13,000 patients whose claims for durable medical 
equipment were processed in 1970. For the 13,000 patients, GAO 
estimated that savings of $234,000 — including the patient's share of 
$47,000 — could have been realized if the equipment had been pur- 
chased when the anticipated periods of need indicated that purchases 
would have been more economical than rentals. 

At a sixth insurance carrier in a fifth state, GAO analyzed a sample 
selected from the claims of the 7,000 patients whose claims were 
processed during August 1971. For the 7,000 patients, GAO estimated 
that savings of $763,000 — including the patient's share of $153,000 — 
could have been realized. 

In line with the recommendations made by GAO in its report, 
legislation (Public Law 92-603) was enacted in 1972 which was 
designed to end the unreasonable expenses to the program resulting 
from unnecessary and costly rental of durable medical equipment. 
Under the legislation, the Secretar}^ of Health, Education and Welfare 
was authorized to experiment with reimbursement approaches (in 
various geographic areas) which are intended to prevent those un- 
reasonable expenses. HEW is also authorized to implement, without 
further legislation, any purchase approach that is found to be workable, 
desirable, and economical. 

Congress has suggested that among the possible approaches to be 
evaluated would be the feasibility of suppliers contracting with the 
Secretary under arrangements whereby rental would be undertaken 
by means of lease-purchase arrangements providing for rental pay- 
ments to terminate when an agreed upon total for purchase was 
reached under another approach, Medicare payment for a covered 
item of durable medical equipment would be made to the supplier 
in a lump sum where it was determined, in accordance with guidelines 
of the Secretary, that outright purchase would probably be more 
economical than lease-purchase; another approach would be to 
encourage beneficiaries to purchase used equipment by waiving the 
20 percent coinsurance requirement where the purchase price of the 
used equipment is at least 25 percent less than the reasonable price 
of the item if purchased new. 

The subcommittee is extremely disappointed to find that now, some 
four years after this legislation was enacted to end this waste of 9}<> 
million taxpayer dollars each year as well as the waste of the limited 
money of the elderly, this abuse continues to rage because the Depart- 
ment of Health, Education and Welfare has still not implemented the 
provisions of this legislation and instituted more economical purchase 
approaches. While HEW has claimed that this delay was needed to 
design an experiment, the subcommittee can see no reason why HEW 
has delayed for 4 years in implementing the legislation. HEW is cur- 
rently conducting a "design of an experimental concept." 

The lack of reason for a four-year delay is pointed out by the fact 
that the National Association of Blue Shield Plans, which represents 
the Blue Shield Plans that presently act as carriers for some 12 million 
Medicare beneficiaries, has informed the subcommittee that "several 



28 



of our plans are actively and eagerly seeking to participate in the 
durable medical equipment reimbursement demonstration authorized 
under Public Law 92-603. " 

C. HOME BLOOD PRESSURE MONITORING KITS 

Another medical appliance which many elderly people purchase is 
the home blood pressure monitoring device. These devices have gone 
from a novelty mail-order item to a heavily purchased appliance 
available in drugstores. The reason for this growth in the use of home 
blood pressure monitoring units is the increased activity by govern- 
ment and health associations in publicizing the great danger of high 
blood pressure. This resulted in an increased public awareness and a 
greater demand for devices that a hypertensive person could use to 
measure their own blood pressure in their own homes. As public 
demand for the devices has increased, there has also been greater 
acceptance by doctors of the value of hypertensives using the devices, 
although many doctors continue to warn against patient use of the 
devices. 

The blood pressure devices that are available in the United States 
fall into two categories: mercurial devices and aneroid devices. Each 
type has both advantages and disadvantages. 

Manufacturers of mercurial devices (blood pressure monitoring units 
which make use of mercury to measure hyper tension), such as Mr. 
John Baum, President of W. A. Baum Co., Inc., claim that these 
devices are the only accurate way to measure blood pressure. They 
argue that accuracy is the most important characteristic on which the 
device should be judged. As Mr. Baum said at a subcommittee hearing, 
"If an instrument is not accurate, and capable of remaining accurate 
it would not be a bargain even as a gift. Truly it is better not to have 
any blood pressure data at all than to have erroneous data." 

On the other hand, distributers of imported aneroid devices (blood 
pressure devices which make use of gravity to measure hypertension) 
such as Mr. Alan Beeber, President of the Lumiscope Company, argue 
that aneroid devices, while not as accurate as mercurial devices, are 
certainly accurate enough for home use, since they do meet a federal 
accuracy standard of .3 millimeter. They claim that any difference in 
accuracy is not significant enough to justify the higher cost of mer- 
curial devices. Because that price difference is so great (mercurial 
devices cost about $50 to $60 while aneroids cost about $25) , aneroid 
distributors argue that practical consumers would be wise to purchase 
the less perfect but sufficiently reliable aneroid. 

In short, the subcommittee has found that the elderly consumer 
who needs a blood pressure device has a choice between the mercurial 
and aneroid types with their possible differences in accuracy and price. 

Regardless of which type the elderly consumer does choose, he or 
she must pay for the device out of his or her own pocket. Medicare, 
Medicaid, and private health insurance policies provide no coverage 
of home blood pressure monitoring units. 

D. COVERAGE OF DURABLE MEDICAL EQUIPMENT UNDER 
MEDICARE FOR RESIDENTS OF INSTITUTIONS 

Another omission of coverage under Medicare which needs correc- 
tion concerns a provision of title XVIII which because of an error in 



29 



drafting or other oversight, has led to denial of coverage of certain 
durable medical equipment to residents of skilled nursing homes and 
intermediate care facilities. 

Section 1861 (s) of title XVIII defines "medical and other health 
services' ' as this term is used in the Scope of Benefits under Part B. 
Medical and other health services includes "durable medical equip- 
ment" defined in Section 1861 (s) (6) as follows: 

(6) durable medical equipment, including iron lungs, oxygen tents, hospital 
beds, and wheelchairs used in the patient's home (including an institution used as 
his home other than an institution that meets the requirements of subsection 
(e)(1) or (j)(l) of this section), whether furnished on a rental basis or purchased. 

The apparent purpose of the parenthetical language is to make these 
benefits available to persons making their homes in institutional 
settings as well as to persons residing in individual homes, but to ex- 
clude them from coverage under Part B when they can be covered 
under Part A. Subsection (e)(1) refers to hospitals and subsection 
(j)(l) refers to skilled nursing facilities which provide post hospital 
extended care services under Part A. 

The problem is created by the fact that the exclusion is written in 
terms of the characteristics of the institution in which a person may 
make his home rather than in terms of the person's entitlement to re- 
ceive the services through the institutional care covered by Part A. 
Many persons make their homes in institutions which meet subsec- 
tion (j)(l) but who are not currently eligible for institutional benefits 
under Part A. These include, for example — 

Patients in skilled nursing facilities who require skilled care but 
not in connection with a prior hospitalization; 

Residents of intermediate care facilities. (Most ICFs "meet the 
requirements of subsection (j)(l)".) 

The most serious manifestation of this problem is in denial of cover- 
age for oxygen. Medicaid generally is not a resource. A few states, but 
very few, provide some oxygen under the heading of prescribed drugs, 
In general, however, the situation is that a person needing oxygen, who 
would be entitled to it under Part B if he resided in an individual home, 
has no access to coverage of oxygen because he makes his home in an 
institution; a situation contrary to the apparent intent of the original 
legislation. 

The problem can be corrected by modifying the parenthetical lan- 
guage in Section 1861 (s) (6) to clarify that the exception intended re- 
lates to persons entitled to the same benefits as a part of institutional 
care for which payments are being made under Part A. 

The Social Security Administration/Bureau of Health Insurance has 
estimated the cost of closing this gap in protection to be between $1 
million and $2 million per annum. 



CHAPTER V— EXISTING CONTRACT PURCHASING 
PROGRAMS: EXAMPLES OF FEDERAL ASSISTANCE 



In investigating the unmet need for medical appliances of the 
elderly, the subcommittee has found several exceptions to the virtual 
lack of meaningful assistance by the health benefit programs intended 
to meet such needs. These represent outstanding examples of action 
D 3 r government agencies to provide low-cost hearing aids, eyeglasses 
and dentures to thousands of people who require those devices. Most 
of these programs, such as those of the Veterans Administration, 
Defense Department, and General Services Administration, make use 
of volume contract purchasing to lower the cost of these appliances. 
These programs have been able to supply medical appliances for 
40 to 500 percent below the cost of identical devices purchased from 
retail outlets. A thorough examination of these existing programs has 
demonstrated to the subcommittee that similar contract purchasing 
, for our nation's elderly would mean an end to the high cost of their 
devices, would end many of the abuses that reduce quality and raise 
costs in these industries, and would help to answer the vast need of 
the elderly for medical appliances. 

A. VETERANS' ADMINISTRATION CONTRACT PURCHASING PROGRAM 

One of the most extensive volume contract purchasing programs is 
operated by the Veterans Administration. In 1975, for example, the 
VA supplied approximately 13,700 hearing aids and 21,000 eyeglasses. 
Because the VA purchases in large volume from the manufacturer 
that has made the lowest bid, these medical appliances were supplied 
at costs far lower than the general retail costs. The VA makes these 
appliances available to veterans in their hospital system or nursing 
homes and to service-connected veterans who need hearing aids. 

In the Veterans Administration's program, eligible veterans who 
have hearing difficulties are first examined at one of the 171 VA 
hospitals by an ear specialist to determine whether medical or surgical 
treatment is appropriate. If a hearing aid seems appropriate, the 
veteran is usually referred to one of the 45 (in 1975) VA contract 
clinics for an audiological evaluation by an audiologist. When the 
VA determines ihat it is not feasible for a veteran to travel to one of 
the audiology clinics, he can be authorized to purchase an aid from a 
local dealer. In such a case, the examining physician must test the aid 
to be purchased on the veteran to assure that it is satisfactory. 

The VA has developed a program for evaluating the more than 500 
models that are available in the United States so that only those of the 
highest quality are selected for distribution. Each year the Veterans' 
Administration invites manufacturers to submit their models for 
possible use by the VA. For example, in 1974, 19 hearing aid manu- 
facturers responded to that invitation and submitted a total of 114 
models for review. These models were submitted to the National 
Bureau of Standards which evaluated their performance charac- 
teristics. The Bureau of Standards then recommended specific models 
to the VA after consideration of their performance and cost. 



(30) 



31 



The VA procures its hearing aids under two arrangements : hearing 
aids are purchased directly from the manufacturer for distribution to 
VA facilities; and where this is not possible, they are purchased from 
local dealers. Of the 13,700 hearing aids the VA purchased in 1975, 
about 95 percent were purchased directly from the 14 manufacturers 
participating in the program. 

The subcommittee has found that the VA program has received 
favorable comments from several congressional committees and 
numerous consumer groups, such as the Public Citizen's Health 
Research Group, the Retired Professional Action Group and the 
Consumers Union. Perhaps most worthy of commendation is the fact 
that the VA program has consistent^ provided the hearing aids for 
extremely low prices. For example, for the current year the cost of the 
medical examination, hearing aid evaluation, overhead, depreciation 
of equipment, utilities, assembly of the hearing aid, and the hearing 
aid itself was estimated to be about $205 by the Veterans Administra- 
tion. While the National Hearing Aid Society representing hearing aid 
dealers, has challenged these figures and claimed that the actual cost 
of a VA hearing aid ranges from $347.17 to $1211, it is important to 
note that the enormous cost savings under the VA program have 
been proven by the General Accounting Office. 

GAO, an independent arm of the Congress, determined that it cost 
the VA an average of $199.90 or $5 less than the figure estimated by 
the VA, to issue a hearing aid. This includes all the costs involved. 
The subcommittee believes that the GAO figure completely refutes the 
National Hearing Aid Society claim and considers the price quite 
remarkable when compared to the average $350 cost to an individual 
purchasing a hearing aid privately from a dealer. In other words, 
the VA, through contract purchasing, has been able to supply almost 14,000 
hearing aids last year alone jor more than Jfi percent less than the general 
retail cost. 

The Veterans Administration also supplies eyeglasses to eligible 
veterans and purchases them direct from the manufacturer. They are 
currently contracting with Bausch and Lomb for this purpose. Under 
the Veterans Administration contract with Bausch and Lomb, the 
prescription is filled and the glasses assembled by the contractor 
at the time the prescription or prescriptions are submitted to them. 
Like the VA hearing aid program, the result of this contract 
has been that glasses are supplied at a cost far below the cost an 
individual purchasing glasses from a dealer would have to pay. The 
average price of glasses provided by the VA is $11 for single vision 
glasses with frames and case and $15 for bifocal glasses with frames 
and case. The identical glasses sold on the open market cost around 50 or 
more than 350 percent more than the price the VA pays. 

B. DEPARTMENT OF DEFENSE CONTRACT PURCHASING PROGRAM 

In addition to the Veterans Administration, there are other examples 
of this type of volume contract purchasing of medical appliances by 
government agencies. For example, the Department of Defense also 
contracts to purchase low-cost eyeglasses direct from the manufacturer 
that has submitted the lowest bid. The Department of Defense dis- 
tributes the lenses, frames, and cases that it purchases to regional 
storage centers, which, in turn, distribute them to installations. The 
Department also operates regional laboratories which fill prescriptions 



32 



placed with them through the installations. The Department of Defense 
orders, for the most part, lenses of various powers and fills prescriptions 
from stock. Lenses are not ground by the Department of Defense or 
contractors at the time that the prescription is presented. The following 
prices were quoted to the subcommittee by a representative of the 
Defense Department Supply Agency in Philadelphia: 

Single vision lenses, glass, pair $1.00-1.05 

Single vision lenses, plastic, pair $1.80-2.00 

Plastic frames $1.00-1.05 

The price range noted for the lenses indicates where the great 
majority of prices for lenses cluster. Some prices do fall outside the 
range, both below and above. For example, some glass lenses may cost 
as little as 85^ and some may cost as much as $9. These costs consti- 
tute only a part of the total cost of eyeglasses since the glasses must 
be shipped to regional storage centers and dispensed through the 
regional laboratories. 

The Defense Supply Agency has informed the subcommittee that 
the final cost of eyeglasses dispensed through the military system 
ranges from $7 to $8. This price is very similar to the price of glasses 
in the Veterans Administration program and again, much lower than 
the cost of eyeglasses purchased retail. 

C. GENERAL SERVICES ADMINISTRATION CONTRACT 

PURCHASING PROGRAM 

Another example of volume contract purchasing resulting in lower 
costs for a medical appliance is the General Services Administration's 
system of providing dental supplies to federal agencies. The General 
Services Administration negotiates with suppliers nationally, region- 
ally, or locally to provide supplies on demand at negotiated prices. 
This enables such agencies as the Indian Health Service and the 
Uniformed Services to obtain dental supplies at considerably below 
the general cost to consumers. 

The cost of false teeth represents the most extreme example of such 
cost differences. Laboratories which make dentures commonly pur- 
chase teeth in sections, putting the sections together to form plates. 
The sections will contain six each for the front teeth and eight for the 
rear teeth. Under the General Services Supply Schedule, federal agen- 
cies are given a 77.93 percent discount (therefore actually paying 
approximately 22 percent of the usual cost) on the purchase of por- 
celain "one by sixes," i.e., front teeth in sections of six. The suggested 
retail price of "one by sixes" purchased normally is $12.86. In sharp 
contrast, the federal agency price with this discount is $2.84. This 
represents a drop of approximately 500 percent. According to the 
Indian Health Service dental laboratory in Albuquerque, which has 
a contract purchasing arrangement with the General Services Admin- 
istration, the cost of teeth is the single largest cost saving when 
comparing the cost of dentures made by the Indian Health Service 
and those made by commercial laboratories. Overall, the difference 
between the 1975 fiscal year costs of dental work performed by the 
Indian Health Service laboratory in Albuquerque and commercial 
laboratories in the same area was between 20 and 25 percent. 



O o 
OO 

The General Services Administration has a similar program for the 
purchase of eyeglasses. The Indian Health Service, one of the agencies 
receiving glasses from the General Services Administration, has told 
the subcommittee that the estimated cost of eyeglasses under this 
program is approximately $18. 

D. OTHER CONTRACT PURCHASING PROGRAMS 

Another example of the lower costs that result from volume con- 
tract arrangements is the group purchasing plan operated for em- 
ployees of the State of Michigan by that state. This program has 
been able to purchase glasses under contract for approximately $14, 
compared to average retail prices of about $35. 

The subcommittee believes that the success of volume contract 
purchasing in lowering the cost of medical appliances has been proven 
numerous times. Existing examples have provided needed appliances 
for prices vastly lower than the cost when purchased by a lone indi- 
vidual from the dealer. Perhaps the ultimate proof of the value of 
these programs is that numerous consumer groups have enviously 
viewed the low costs that result from volume purchasing arrangements 
and have formed cooperatives. For example, in Michigan two such 
cooperatives have been formed of people, including many senior citi- 
zens, who have banded together to purchase the medical appliances 
that they need. The result has been significant reduction in the cost 
of the hearing aids and glasses that these cooperatives have purchased. 



CHAPTER VI— CONCLUSIONS AND 
RECOMMENDATIONS 



The Subcommittee on Health and Long-Term Care has investigated 
the needs of the elderly for eyeglasses, dentures, and hearing aids and 
the costs of these medical appliances. That investigation has demon- 
strated to the subcommittee that, in the area of medical appliances, 
the elderly are simply not receiving the high-quality health care 
that they are entitled to and that they so desperately need. For 
example, five million elderly Americans are wearing glasses which 
need correction. 3.4 million Americans over 65 have dentures which 
need to be replaced or refitted. Finally, 1.5 milhon elderly Americans 
are unable to hear words that are spoken in a normal voice and need 
cither hearing aids or medical help. 

In theory, public and private health benefit programs were created 
to meet this type of severe health need. However, in the area of 
appliances, these programs have been of only the most limited help. 
As this report has shown, Medicare does not cover the cost of eye- 
glasses, hearing aids, or dentures. Medicaid does cover these devices, 
but only in some of the states. Finally, private health insurance 
policies rarely cover eyeglasses and hearing aids and cover dental 
costs only occasionally. In short, elderly people who need medical 
appliances must either pay for them out of their own pockets or simply 
do without them. 

The wav to answer the vast unmet need of the elderlv for medical 
appliances is for the federal government to become more active in 
helping the elderly in this area. The Subcommittee considers this 
increased federal assistance to the elderly vital; it is the only way to 
insure that the elderly have these vital health aids. 

This federal assistance to the elderlv could be provided in two wavs : 
either as part of a comprehensive national health insurance program or 
separately, as an extension of Medicare. 

RECOMMENDATION NO. 1— MEDICARE PART B SHOULD BE EX- 
TENDED TO COVER EYEGLASSES, HEARING AIDS, DENTURES, 
AND RELATED MEDICAL CARE. 

The subcommittee believes that in the absence of national health 
insurance, it is essential that legislation be passed which would extend 
coverage under Part B of the Medicare program to provide payments 
for: dentures (including the repair thereof and such dental services as 
are necessary to lit such dentures, including the extraction of teeth), 
eyeglasses (and eye examinations for the purpose of prescribing, fitting, 
or changing eyeglasses or for the purpose of determining the need 
therefor), and hearing aids (including hearing examinations for the 
purpose of determining the need thereof) . 

An earlier subcommittee report, "New Perspectives in Health Care 
for Older Americans, " recommended this extension of Medicare 
Part B. This report restates that recommendation and further docu- 



(34) 



35 



merits its urgency. Legislation to authorize this extension, such as 
H.R. 12676, sponsored by Rep. Claude Pepper, and H.R. 12481, 
sponsored by Rep. Wm. J. Randall, should be enacted. 

The subcommittee has found that the Medicare Part B extension 
could be quickly implemented by making use of existing Medicare 
administrative mechanisms. The additional coverage would represent 
no extra burden to those mechanisms. For example, the National 
Association of Blue Shield Plans, which presently acts as the carrier 
for some twelve million Medicare beneficiaries, has informed the 
subcommittee that their member plans "have the experience, the 
capability, and the willingness to administer any new form of properly 
designed medical appliance benefits for the aged." 

With the extension, elderly people who choose to enroll in the volun- 
tary Part B program by paying the premiums would be covered for 
these expenses. Once they spend more than $60 in a year on covered 
Part B medical care expenses, Medicare would pay 80% of the 
reasonable charges for the eyeglasses, hearing aids, and dentures that 
are determined to be medically necessary by a physician. 

To finance the additional benefits, Part B monthly premiums and 
the federal contribution to the Part B program would be increased 
slightly. For example, by apportioning the costs of these new benefits 
in the same way as Part B costs were apportioned in 1977 (with pre- 
miums covering approximately 30 percent of program costs), the effect 
of the proposal would be an increase of $2.66 per month in the pre- 
miums paid by those elderly people who opt to participate in the pro- 
gram. Premiums would thus be increased from the present level of 
$7.20 to $9.86 a month. 

With this small increase in monthly premiums, the subcommittee, 
with the assistance of the Department of Health, Education, and Wel- 
fare, has estimated that the cost to the federal government of operating 
the extended Part B Medicare program for eyeglasses, hearing aids, 
and dentures would be $1.9 billion per year. As is presently done with 
the federal share of the existing Medicare Part B program, the federal 
share of the costs of the program would be paid from general revenues. 
Thus, the integrity of the social security trust fund will not be affected. 

These cost estimates are for the initial year of coverage. According 
to testimony presented to the Subcommittee at its June 23 hearing by 
the Department of Health, Education, and Welfare, during this first 
year of the program as well as the following 4 years, the cost of the 
program paid by the elderly in premiums and by the federal govern- 
ment would have to be maintained at these levels because of the 
enormous backlog of elderly people who are presently in desperate need 
of medical appliances. Thus, it is important to note that the cost paid 
by the elderly and by the federal government for this Medicare Part B 
extension, would decline drastically by the program's sixth year. That 
decline would be as much as $1 billion below the total first year cost of 
the program, depending upon the cost of inflation during this period. 

Thus, the total first year cost of this Medicare extension would be 
$2.7 billion ($300 million for hearing aids, $600 million for eyeglasses, 
and $1.8 billion for dentures) : the total annual cost after the fifth year 
would be reduced to approximately $1.7 billion (plus inflation). 

With the extension of Medicare Part B, the subcommittee recom- 
mends that the Secretary of Health, Education and Welfare be 
directed to establish reasonable limits on the amounts that would be 
allowed for hearing aids, eyeglasses, and dentures and on the amounts 



36 



allowed for the related medical services. The Secretary should also be 
directed to establish such standards for participation of suppliers, and 
for the health items themselves, as he deems necessary in order to 
protect the health and safety of the patient and to help assure the 
effectiveness and propriety of the services and items that would be 
covered. In addition, the Secretary should be directed to establish, by 
regulation, such limitations and presumptions as to quality and quan- 
tity of devices as he may deem to be reasonable in order to prevent 
payment for items and services which may be unnecessa^ or excessive. 
This would include requirements for certification of medical need by a 
physician or other appropriate professional. It is important to note 
that present law (Social Security Act — Section 1832(a)(2)(b)) re- 
quires such certification of medical need by a physician before Medi- 
care payment can be made for those appliances which are already 
covered by Medicare. Thus, there is a clear precedent for such a 
requirement for eyeglasses, hearing aids, and dentures as well. 

The omission of coverage for residents of skilled nursing facilities 
and intermediate care facilities of certain durable medical equipment 
under Medicare, Section 1861 (s) of title XVIII should be corrected. 
Modification of the parenthetical language in Section 1861 (s) (6) to 
clarify that the exception intended relates to persons entitled to the 
same benefits as a part of institutional care for which payments are 
being made under Part A. The cost of such coverage is between $1 
million and $2 million per annum. 

RECOMMENDATION NO. 2— MEDICARE SHOULD UTILIZE CONTRACT 
PURCHASING WHERE FEASIBLE IN PROVIDING EYEGLASSES, 
HEARING AIDS, AND DENTURES TO THE ELDERLY. 

While the subcommittee considers it imperative that Medicare 
benefits be extended, it considers it equally imperative that the ex- 
tension not be done in such a way as to allow the inadequacies and 
overpricing of the present delivery system of medical appliances to 
continue. Indeed, it would be tragic if the Medicare extension would 
mean additional profits and rewards for those who would perpetuate 
the abuses of the present. 

One way of insuring that a Medicare extension would not mean 
continued high costs for medical appliances is to use contract pur- 
chasing of these devices. As a result of convincing testimony during 
subcommittee hearings, the subcommittee recommends that volume 
contract purchasing of eyeglasses, hearing aids, and dentures be 
utilized by the Department of Health, Education, and Welfare to 
provide these appliances to the people who pay the Part B premiums. 
Existing contract purchasing programs, operated by the Veterans 
Administration, the Department of Defense, the General Services 
Administration, the state of Michigan, and others, are conclusive 
proof that this would lower the cost of medical appliances from the 
excessively high levels of the present. 

The subcommittee recommends that legislation be passed instructing 
HEW to begin experimenting with volume contract purchasing as 
soon as possible. In addition, the legislation should make it the official 
HEW policy, to be gradually phased in within the next 5 to 10 years, 
that volume purchasing be used wherever feasible, to provide eye- 
glasses, hearing aids, and dentures to those covered by the Medicare 



37 



extension. The subcommittee also recommends that states consider 
making use of contract purchasing of medical appliances, as part of 
their Medicaid programs. 

Such a contract purchasing program might work in the following 
way: manufacturers of medical appliances would be invited to bid by 
submitting models of their appliances, the lowest price at which they 
could provide the devices through retail outlets to those eligible, and 
information concerning the number of retail outlets that distribute 
their devices. The Secretary of Health, Education, and Welfare would 
then, on the basis of those bids, choose among the manufacturers and 
contract with as many of them as necessary for large volume purchases 
of the devices. It is important to note that it would not be necessary to 
contract with only a limited number of companies in order to enjoy 
the cost reduction that results from large volume purchasing. Here, 
the existing purchasing program operated by the Veterans Admin- 
istration serves as a clear precedent: for example, in 1974, the VA 
contracted with H different manufacturers for the purchase of a total 
of 13,700 hearing aids. The result of these contracts was that the VA 
was able to supply hearing aids for an average cost of about $200, 
drastically lower than the average $350 retail hearing aid cost. 

The manufacturers that are awarded the contracts would be 
responsible for providing the appliances, for the stipulated price, to 
retail outlets. The retail outlets would then distribute the appliances 
to elderly consumers who have paid the Part B premiums. Medicare 
pa}Tnents to the retailers would be based on : 

The lower range of estimated acquisition costs incurred by the individuals who 
provide the newly covered items to the patient on an economical basis; plus 

A fee for the dispenser of the item which is sufficient to compensate the more 
efficient suppliers and providers for the services rendered. 

Elderly consumers who are covered by Part B and who did not want 
to purchase their health aids from these manufacturers, could purchase 
their hearing aids, eyeglasses, and dentures from other companies. In 
that case, they would receive reimbursement from Medicare for the 
price that the identical device would cost when purchased through the 
contract program. They would not be reimbursed for the difference 
between the lower contract purchase price and the higher open market 
charge. 

This system, in addition to lowering the cost of the appliances, 
would still allow elderly consumers the freedom of choice to determine 
whether or not they want to participate in the program. Since this 
system would aliow consumers the choice of buying a device from a 
contract outlet or not, the Subcommittee has found that it would be 
consistent with Section 1802 of the Social Security Act which guaran- 
tees patients the free choice of providers of Medicare services. 

By the same token, manufacturers who did not wish to participate 
in the program or who were not selected for the program would still be 
free to provide covered services. In this case, they could not bill 
Medicare directly. They would bill the patient for the agreed price. 
The patient, if covered by Medicare Part B, would receive the limited 
reimbursement described above. 

Finally, it is important to note that there is a clear precedent for 
HEW's use of such reimbursement limits. The 1972 Medicare legisla- 
tion provided for payments for items of durable medical equipment to 
be based on the lowest charge level at which they are widely and con- 
sistently available from local suppliers. In addition, as of September, 



38 



1976, HEW is implementing such a measure concerning drugs pur- 
chased through the Department's various health service and health 
benefit programs. As part of this effort, the government's reim- 
bursement to pharmacies is being limited to the estimated acquisition 
cost of the drug to the pharmacist plus a dispensing fee. 

RECOMMENDATION NO. 3— A SERIES OF SAFEGUARDS SHOULD BE 
ENACTED TO END ABUSES AGAINST ELDERLY MEDICAL APPLI- 
ANCE CONSUMERS. 

In its investigation of the hearing aid, eyeglasses, and denture 
industries, the Subcommittee has seen numerous examples of the 
abuse of consumers purchasing these health aids. For example, as this 
report has demonstrated, in the hearing aid industry alone, there is 
evidence of inadequate training of dealers, anti-competitive practices, 
anti-trust violations, misrepresentation, and the sale of unnecessary 
hearing aids to unwitting consumers by those dealers. The Subcom- 
mittee thus believes, that extending Medicare coverage and the use of 
contract purchasing represent onry part of the solution. They alone 
will not insure that these abuses will no longer be a part of these 
industries. 

The subcommittee recommends that a series of major safeguards 
be enacted in this area to protect elderly consumers from the kinds 
of abuses that they suffer today. Only through these positive actions 
can we genuinely insure that the elderly will receive the highest 
quality medical appliances and medical care. 

The first of these safeguards is continued and increased scrutiny of 
these industries by the federal agencies which have the responsibility 
of overseeing these industries and protecting the consumer. For ex- 
ample, the subcommittee again requests, as the chairman did in the 
subcommittee's June 23 hearing, that the Federal Trade Commission 
investigate unreasonable charges in the hearing aid, eyeglass, denture 
and pacemaker industries. A thorough investigation is vital in order 
to stamp out the anti-competitive activities and anti-trust violations 
that may be widespread in that industry, as discussed earlier in this 
report. 

Another example of an area which requires increased oversight by a 
federal agencj- is the home blood pressure device industry. The sub- 
committee urges the Food and Drug Administration to determine the 
accuracy of aneroid and mercurial devices and to issue minimum 
standards of accuracy with which blood pressure devices must comply 
in order to be available for purchase. 

The second safeguard that the subcommittee advocates is action by 
the individual states or a national Federal Trade Commission regu- 
lation to end price advertising bans on these devices. Presently, 
only four states (Texas, Florida, Virginia, and Massachusetts) allow 
such price advertising. Analysis by the Federal Trade Commission's 
Bureau of Consumer Protection has demonstrated that such bans 
"reduce competition, restrict consumer access to information, and 
allow higher than competitive prices to exist." The best example 
of this is eyeglasses, where a lack of advertising has led to little 
consumer knowledge of the incredible 200 to 300 percent variance 
in the price of glasses. 



39 



This lack of information about low- and medium-priced eyeglass 
retail outlets is particularly harmful to the elderly. There are two 
reasons for this: First of all, many elderly people have very limited 
and often fixed incomes. They cannot afford to waste limited dollars 
on overpriced medical appliances. The excessively high price may 
actually prevent an elderly person from obtaining a desperately 
needed health aid. Second of all, many elderly persons are severely 
limited in the scope and range of their mobility and activities due to 
chronic illness. As such, they are unable to engage in the kind of 
"comparative shopping" that would help them find lower prices. 
Thus, they have a special need for accessible price information through 
advertising. 

The third set of safeguards are needed to eliminate those Medicare 
expenditures which are excessive and unnecessary. First of all, the 
Department of Health, Education, and Welfare should immediately 
implement leasing or other economical methods of obtaining medical 
equipment. Legislation authorizing this was passed four years ago 
and HEW is only now beginning to "design an experimental concept' ' 
in this area. The subcommittee can see no reason for the delay and the 
continued waste. Furthermore, the Subcommittee urges HEW to 
closely scrutinize the costs that Medicare pays for health aids already 
covered by Medicare. HEW should impose reimbursement ceilings 
and pay only "reasonable charges," as mandated by the Social Security 
Act (see 1814b and 1861v). It should not subsidize the enormous 
profits of pacemaker manufacturers, for example, and ignore obvious 
overpricing. The Department must begin to conduct oversight of 
payments to these industries. 

Other HEW actions that are needed in order to end abuses of Medi- 
care covered medical appliances include audits, at least on a random 
basis, of medical appliance manufacturers and providers. These 
audits should investigate the possible use of hidden discounts and 
other types of fraud. To conduct these audits, HEW, through its 
Bureau of Health Insurance, should adequately train existing person- 
nel or hire other personnel who can perform such procedures. If 
on the basis of such an audit, a manufacturer, provider, or if a con- 
sumer is found to have defrauded Medicare or the public in this 
area, they should be subject to a uniform system of quick and severe 
penalties. The penalties should be developed in conformity with due 
process and existing criminal and civil codes. 

In addition, HEW should promulgate regulations or guidelines 
which would reinforce the freedom of choice of Medicare recipients 
among health care providers as guaranteed in Section 1802 of the 
Social Security Act. One way to maximize the effect of this freedom 
of choice provision would be to allow provider agencies to prescribe 
the type and essential specifications of equipment needed by the 
patient and perhaps suggest a range of brands that met these require- 
ments, but allow the consumer to purchase his own equipment. 
The involvement of individual providers or provider agencies in 
controlling significant portions of the medical appliance industry 
through their ability to refer cases as part of home care for a patient 
would thus be limited. Present procedures lack checks and balances 
in this area and might lead to elimination of marketplace control of 
medical appliances as well as overbilling, hidden discounts, rebates, 
and overutilization. Home health agencies and medical providers 
may add automatic service or overhead charges in connection with 



40 



a single medical appliance manufacturer in furnishing the equipment 
to the patient. It is important to note that in implementing the 
safeguard, care must be taken so that the new procedures will not in 
effect take away benefits from beneficiaries. The subcommittee thus 
believes that the steps taken to protect freedom of choice must either 
concern administrative expenses such as multiple related overhead 
operations or a reasonable alternative approach of eliminating the 
provider agency as middleman. 

Finally, HEW should mandate cross referencing of prevailing rates, 
in order to create a profile of prices in a particular area, by all Part A 
and Part B intermediaries. The intermediaries would then know the 
maximum amount pa}^able in an area and would have a profile of what 
each medical equipment supplier charges. This action would make 
payments largely conform to "prudent buyer" guidelines. The Part A 
intermediary would know the maximum amount payable to the 
supplier under Part B. The Part B intermediary would know what a 
supplier is charging agencies for inclusion in the computation of the 
supplier's profile. 

The subcommittee believes that there is an especially severe need 
for a series of safeguards specifically directed at ending the inadequacies 
of the present hearing aid delivery system. As representatives of the 
American Speech and Hearing Association stated in testimony sub- 
mitted to the subcommittee: 

A preoccupation with profit significantly diminishes the (hearing aid) industry's 
potential to serve and generally benefit the health and welfare interests of hearing- 
impaired Americans. Industry efforts toward responsible, genuine self-regulation 
have failed miserably. Attempts to achieve the kind of industry-professional con- 
sensus which might have made these regulations unnecessary also have been 
unsuccessful. Clearly, the time has come for the imposition of responsible industry 
standards by the federal government. 

One example of such a responsible standard that should be imposed 
by the Federal Government is the proposed FTC regulation that 
hearing aid 'purchasers must have the right to return hearing aids. Another 
example of a badly needed standard is the proposed regulation that 
would require hearing aid manufacturers to label their advertising with 
the following disclosure: "Many persons with a hearing loss will not 
receive any significant benefit from any hearing aid. ,} A third example is 
the proposed regulation which would make it illegal to use certain 
techniques in selling hearing aids. For example, door to door sale of 
hearing aids without the consent of the prospective buyer would be 
barred. The subcommittee endorses these three proposals as vital in 
order to reduce the large number of consumers who end up stuck with 
hearing aids for which they have spent hard earned dollars and which 
provide no improvement in hearing. Thus, the subcommittee recom- 
mends that the Federal Trade Commission, which has proposed the 
regulations, implement the proposals as soon as possible. 

In addition, the subcommittee considers it essential that the Food 
and Drug Administration promulgate a regulation which would require 
prior examination by a physician, preferably a hearing specialist, to 
purchase a hearing aid. The present lack of any such requirement is 
the chief cause of the millions of dollars that are wasted for hearing 
aids that can be of no help. The subcommittee rejects any solution to 
this problem that does not include a medical clearance requirement 



41 



which would be binding on everyone except where specific exemptions 
are allowed. Thus, it condemns the proposal by the Food and Drug 
Administration which would allow anyone over the age of 18 who does 
not have certain symptoms simply to waive the required examination. 
While the waiver's proponents argue that it is needed because people 
in some rural areas have no access to medical care, the subcommittee 
believes that this is not sufficient reason to allow ever} r one the right 
to waive the requirement. The subcommittee favors a different ap- 
proach to this medical clearance issue. It favors exemptions to the 
requirement where they are needed (for example when an individual 
lives in a rural area where there is no access to a doctor or when an 
individual's religious beliefs forbid an examination by a physician) 
but believes that all those not specifically exempted on these grounds 
should be required to see a doctor, preferably a hearing specialist, before 
purchasing a hearing aid. Thus, the FDA's current proposal negates 
the requirement for medically determined need on the grounds that 
the requirement may be inappropriate for a handful of Americans. A 
much more logical approach would be to simply exempt such persons 
for whom medical clearance might not be appropriate, but to maintain 
the requirement for everyone else. Thus, the subcommittee considers 
the FDA proposal inadequate. 

Finally, the last of the series of safeguards needed in the hearing 
care area is increased assistance by the Federal Government through 
the Department of Health, Education, and Welfare, to encourage 
continuing education and training programs for hearing specialists, 
clinical audiologists, and physicians in order to improve the quality 
of the hearing care they provide. Similarly, state and local public 
health departments should be encouraged by the Federal Government 
to provide greater hearing care to the elderly, including a network of 
examination and treatment sites. 

RECOMMENDATION NO. 4— THE SUBCOMMITTEE RECOMMENDS THAT 
ALL PEOPLE PURCHASING EYEGLASSES, HEARING AIDS, AND 
DENTURES USE CONSUMER DISCRETION TO AVOID ABUSES SUCH 
AS OVERPRICING AND UNNECESSARY SERVICES. 

In its investigation of the delivery system of medical appliances, the 
subcommittee has found numerous suggestions that consumers can 
use to avoid overpriced delivery and unnecessary services. The sub- 
committee recommends that people purchasing medical appliances 
make use of these "consumer tips" in order that they will have eye- 
glasses, hearing aids, and dentures that are of the highest possible 
quality and the lowest possible price. In addition, where appropriate, 
the federal government and regional and local authorities should dis- 
seminate such information to consumers. These suggestions are not 
intended to serve as a complete listing, but are ones which the Sub- 
committee felt might be useful to consumers. Some general sugges- 
tions include : 

1. If you are not eligible for participation in an existing contract 
purchasing program (see Chapter V — Existing Contract Purchasing 
Programs: Examples of Federal Assistance) you might wish to form 
your own group of consumers with similar needs. Such groups can 
save large amounts of money on medical appliances by purchasing in 
large volume. 



42 



2. Be a comparative shopper so that you can find the medical 
appliance that you need for the lowest cost at which it is available. 
In states where price advertising of these devices is legal, use these 
publicly posted prices as part of your comparative shopping and 
encourage all retailers in these areas to advertise their prices. 

More specific suggestions for purchasing medical appliances include : 

Eyeglasses 

L When having your eyes examined by an optometrist or optha- 
mologist, make sure that the examination is thorough. It should 
include questions concerning your complete case history and tests for 
near, distant, depth, peripheral, color, and unaided vision. Eye 
coordination should also be tested. Also, be sure that the atmosphere 
of the examination is professional and not that of a hurried selling job. 
Check to make sure you are not asked to examine eye charts under 
conditions that might make those charts appear unclear such as an 
unfocused slide or a poorly lit room. 

2. After the examination, don't simply accept what is suggested. 
Insist on asking questions if you have them. For example, if you 
already wear glasses and are told that you need a new prescription, 
ask about the amount of change between the old prescription and the 
new one. If the change is a small one (something under half a measure 
called a diopter) you might wish to get a second opinion about the 
need for new glasses. 

3. Get the prescription from the opthamologist or optometrist who 
has examined your eyes. Then begin comparative shopping to find the 
optometrist or optician who can provide the necessary glasses at the 
lowest price. Keep in mind the tremendous variance in the cost of 
identical eyeglasses. You might wish to consult friends or physicians 
for their suggestions of where inexpensive glasses can best be 
purchased. 

Dentures 

1. Before buying dentures you need to choose a dentist. "Shop 
around" for the best one. Consult your family physician for his 
recommendation of a good dentist. You might also wish to get recom- 
mendations from the faculty of a local university's school of dentistry. 
Finally, in some areas, public-interest groups have compiled directories 
of dentists, listing facts about their backgrounds and practices which 
would be helpful in selecting a dentist. 

2. Consider getting dentures at a low-cost dental clinic. Many 
dental schools, for example, operate such clinics. 

3. Once you have selected a dentist, make sure that you are receiv- 
ing a satisfactory examination. For example, good dentists will inquire 
about your medical and dental history and will thoroughly examine 
external structures, teeth, and gums. 

4. Insist that the dentist provide an estimate of fees before any 
treatment is given and an itemized bill afterward. Do not be afraid to 
ask for this information before you receive dental care. 

5. Finally, you should insist that before any steps, such as extrac- 
tions, are made, the dentist should go over the situation with you. He 
should discuss alternative methods of treatment based on his examina- 
tion of the condition of your mouth. Make sure that you are satisfied 
with his explanation before you invest in expensive dental care. 



43 



Hearing Aids 

1. Before purchasing a hearing aid, have your hearing examined 
by an otolaryngologist (ear, nose, and throat specialist) or an otologist 
(ear specialist). These people are physicians and have the expertise 
and impartiality to determine whether or not a hearing aid is needed. 
Hearing aid dealers do not and, unfortunately, may sometimes 
prescribe unnecessary or incorrect hearing aids when alternative 
treatment or no treatment is in fact required. 

2. Be extremely skeptical of hearing aid advertisements which 
announce "the latest electronic wizardry" and guarantee that the aid 
will "return your hearing to normal." These claims may be just 
that — claims. In this regard it is interesting to note that Consumer 
Reports Magazine has concluded that hearing aids available today 
are "no better," so far as performance affecting speech intelligibility 
is concerned, than aids tested in the pre-transistor days of 1951. 

3. Before purchasing a hearing aid, check with the dealer and see 
what guarantee comes with the aid. A few dealers do offer a money- 
back agreement to consumers (if a dealer does agree to a money-back 
arrangement, make sure you have him put it in writing). Most 
dealers, however, will only allow unsatisfied consumers to exchange 
hearing aids. 

4. In deciding which hearing aid to buy, do some comparative shop- 
ping. Don't be afraid to compare the cost of the devices among dif- 
ferent dealers. This will assist in avoiding overchanging. 

5. Once you have purchased a hearing aid, go through a period of 
training in order to get the best use of the aid. The hearing aid itself 
is not enough. Either an audiologist or a dealer can teach you how to 
best use your hearing aid in different situations. In addition, you can 
receive further training in lip reading and other skills that will im- 
prove your hearing comprehension at a hearing clinic. 



GLOSSARY 



ACO — American College of Otolaryngology, the national organization that 
represents physicians who specialize in care of the ear, nose, pharynx, and larynx. 

ASHA — American Speech and Hearing Association, the national organization 
that represents audiologists (defined below) . 

Audiologist — A person who has a master's degree or the equivalent in the re- 
habilitation of those whose impaired hearing cannot be improved by medical or 
surgical means. It is important to note that by law, audiologists cannot provide 
medical examinations or care. 

Edentulous — Without natural teeth. 

Hearing aid dealer — An individual who fits, sells, and services hearing aids. 
Some have completed a 20-week home-study course, passed an examination 
sponsored by the NHAS (defined below), and been certified by the NHAS. 

Hearing specialist — A physician who specializes in hearing disorders. See 
"otolaryngologist" and "otologist." 

NHAS — National Hearing Aid Society, the national organization that repre- 
sents and provides home-study training to hearing aid dealers. 

Opthamologist — A physician who specializes in the diagnosis and medical and 
surgical treatment of diseases and defects of the eye and related structures. 

Optician — An expert who deals in the science, craft, and art of optics as applied 
to the translation, filling, and adapting of opthalmic prescriptions, products, and 
accessories. 

Optometrist — A person trained and licensed to examine and test the eyes and to 
treat visual defects by prescribing and adapting corrective lenses and other optical 
aids, and by establishing programs of exercises. 

Otologist — A physician who specializes in that branch of medicine which deals 
with the ear, its anatomy, physiology, and pathology. 

Otolaryngologist — A physician who specializes in that branch of medicine which 
deals with the ear, nose, pharynx and larynx, and their diseases. 

Periodontal disease — Disease of the bone and tissue supporting the teeth. A 
common dental disease among the elderly. 



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